Home Ownership Preservation and Protection Act of 2007

Bill: 110-s-2452
Sponsor: Sen. Dodd, Christopher J. [D-CT]
Introduced: 2007-12-12 in the Senate
Policy area: Finance and Financial Sector
Subjects: Administrative procedure
Commerce
Commercial arbitration
Consumer credit
Consumer protection
Credit unions
Crime and Law Enforcement
Damages
Department of Justice
Executive reorganization
Federal Bureau of Investigation (FBI)
Federal Deposit Insurance Corporation
Federal Reserve System
Federal law enforcement officers
Fees
Foreclosure
Fraud
Government Operations and Politics
Government corporations
Housing and Community Development
Insurance premiums
Law
Liability (Law)
Loan defaults
Mortgage guaranty insurance
Mortgage interest rates
Mortgages
National Credit Union Administration
Property insurance
Property tax
Prosecution
Public prosecutors
Real estate appraisal
Restrictive trade practices
Settlement costs
Taxation

Summary:
action_date: 2007-12-12
text: 
Home Ownership Preservation and Protection Act of 2007 - Amends the Truth in Lending Act to redefine high-cost mortgages and attendant lending practices. Sets forth a new formula for points and fees for open-end loans, and provides for bona fide discount points.
 
Prohibits: (1) prepayment penalties; (2) balloon payments; (3) yield spread premiums; (4) acceleration or debt; (5) evasions, structuring of transactions, and reciprocal arrangements; and (6) modification and deferral fees.
 
Prohibits creditors from financing, in connection with a high-cost mortgage, any prepayment fee or penalty, or any points or fees.
 
Prohibits an originator from making or arranging a high-cost mortgage loan that involves a refinancing of a prior existing home mortgage loan unless the new loan will provide a net tangible benefit to the consumer.
 
Sets forth prerequisites for subprime and nontraditional home loans, including: (1) an assessment of ability to pay; (2) a requirement of tax and insurance escrows; (3) prohibition of prepayment penalties and yield-spread premiums; and (4) a requirement of net tangible benefit to the consumer in the case of a subprime or nontraditional mortgage loan transaction that involves refinancing of an existing home mortgage.
 
Imposes a duty of care and a duty of good faith and fair dealing upon mortgage brokers and lenders, appraisers, and lenders and loan servicers.
 

 
Empowers state Attorneys General to enforce this Act.
 
Subjects lenders, loan servicers, creditors and mortgage brokers to civil liability for violations of this Act. Increases the amount of the penalty that may be awarded.
 
Amends the Real Estate Settlement Procedures Act of 1974 to require a transferor of loan servicing before the transfer tonotify the borrower of the status of the account and its full payment history.
 
Amends the Housing and Urban Development Act of 1968 to revise requirements for foreclosure prevention counseling.
 
Amends the Truth in Lending Act to expand from three to six years an obligor's right of rescission.
 
Imposes liability for monetary damages upon assignees of subprime or nontraditional loans for violations of this Act.

Sets forth a remedy in lieu of rescission for certain violations.

Prohibits mandatory arbitration.
 
Subjects a lender to liability for certain actions, omissions, and representations made by a mortgage broker in connection with a high-cost mortgage, a subprime mortgage, or a nontraditional mortgage.
 
Amends the Federal Trade Commission Act to require the federal banking agencies and the National Credit Union Administration Board each to establish a separate division of consumer affairs protection and regulations with respect to depository institutions and federal credit unions.
 
Authorizes appropriations to employ additional agents of the Federal Bureau of Investigation and additional dedicated prosecutors at the Department of Justice to coordinate prosecution of mortgage fraud efforts with the offices of the U.S. Attorneys.


Legislative actions:
action_date: 2007-12-12
text: Read twice and referred to the Committee on Banking, Housing, and Urban Affairs. (text of measure as introduced: CR S15236-15244)
action_date: 2007-12-12
text: Sponsor introductory remarks on measure. (CR S15235-15236)
action_date: 2007-12-12
text: Introduced in Senate