In this task, you are given text for US Congressional and California state bills, your task is to generate a summary for this bill.

Example Input: SECTION 1. SHORT TITLE.

    This Act may be cited as the ``Mandatory Foreclosure Mediation 
Act''.

SEC. 2. DEFINITIONS.

    In this Act, the following definitions shall apply:
            (1) Alternative to foreclosure.--The term ``alternative to 
        foreclosure''--
                    (A) means a course of action with respect to a 
                mortgage offered by a servicer to a borrower as an 
                alternative to a covered foreclosure action; and
                    (B) includes a short sale and a deed in lieu of 
                foreclosure.
            (2) Borrower.--The term ``borrower'' means a mortgagor 
        under a mortgage who is in default or at risk of imminent 
        default, as determined by the Secretary through regulations.
            (3) Foreclosure action.--The term ``foreclosure action'' 
        means a judicial or nonjudicial foreclosure.
            (4) Loan modification program.--The term ``loan 
        modification program'' means a program or procedure designed to 
        change the terms of a mortgage in the case of the default, 
        delinquency, or imminent default or delinquency of a mortgagor, 
        including a loan modification program established by a servicer 
        that reduces the principal owed by the mortgagor on the 
        mortgage.
            (5) Mortgage.--The term ``mortgage'' means a federally 
        related mortgage loan, as defined in section 3(1) of the Real 
        Estate Settlement Procedures Act of 1974 (12 U.S.C. 2602(1)), 
        that is secured by a first or subordinate lien on residential 
        real property.
            (6) Secretary.--The term ``Secretary'' means the Secretary 
        of Housing and Urban Development.
            (7) Servicer.--The term ``servicer''--
                    (A) has the same meaning as in section 6(i) of the 
                Real Estate Settlement Procedures Act of 1974 (12 
                U.S.C. 2605(i)); and
                    (B) includes a person responsible for servicing a 
                pool of mortgages.

SEC. 3. MEDIATION REQUIRED BEFORE FORECLOSURE.

    (a) Initiation of Foreclosure Actions.--A servicer may not initiate 
a foreclosure action against a borrower unless the servicer has--
            (1) made a reasonable effort to initiate mediation 
        proceedings in accordance with the process established in 
        regulations prescribed pursuant to subsection (c) to determine 
        whether the borrower is eligible for a loan modification or an 
        alternative to foreclosure; and
            (2) offered the borrower a loan modification or an 
        alternative to foreclosure, if the borrower is eligible for the 
        loan modification or alternative to foreclosure.
    (b) Suspension of Foreclosure Actions.--
            (1) In general.--A servicer shall suspend a foreclosure 
        action that was initiated before the date of enactment of this 
        Act until the servicer--
                    (A) completes a mediation proceeding in accordance 
                with the process established in regulations prescribed 
                pursuant to subsection (c) to determine whether the 
                borrower is eligible for a loan modification or an 
                alternative to foreclosure; and
                    (B) offers the borrower a loan modification or an 
                alternative to foreclosure, if the borrower is eligible 
                for a loan modification or an alternative to 
                foreclosure.
            (2) Suspension.--During the period of the suspension under 
        paragraph (1), a servicer may not--
                    (A) send a notice of foreclosure to a borrower;
                    (B) conduct or schedule a sale of the real property 
                securing the mortgage of the borrower; or
                    (C) cause final judgment to be entered against the 
                borrower.
            (3) Reasonable efforts.--A servicer is not required to 
        suspend a foreclosure action under paragraph (1) if the 
        servicer--
                    (A) makes a reasonable effort to schedule a 
                mediation proceeding to determine whether the borrower 
                is eligible for a loan modification or an alternative 
                to foreclosure; and
                    (B) documents that the borrower has not agreed to a 
                mediation proceeding to determine whether the borrower 
                is eligible for a loan modification or an alternative 
                to foreclosure.
            (4) Rule of construction.--Nothing in this section may be 
        construed to require a servicer to delay an unavoidable 
        foreclosure, such as foreclosure that results from a borrower 
        abandoning the residential real property securing a mortgage.
    (c) Establishment of Mediation Process.--The Secretary shall 
establish through regulations a mediation process to determine whether 
the borrower is eligible for a loan modification or an alternative to 
foreclosure under this section.

SEC. 4. BAR TO FORECLOSURE ACTIONS.

    (a) In General.--Subject to subsection (b), a violation of this Act 
shall be a bar to a foreclosure action.
    (b) Effect of Subsequent Compliance.--If a servicer is in 
compliance with this Act, the servicer may bring or proceed with a 
foreclosure action, without regard to a prior violation of this Act by 
the servicer.

SEC. 5. REGULATIONS.

    Not later than 90 days after the date of enactment of this Act, the 
Secretary shall issue regulations to carry out this Act.

SEC. 6. REPORT.

    Each servicer that initiates mediation proceedings under section 3 
shall submit to the Secretary a quarterly report at such time, in such 
manner, and containing such information, with respect to such 
proceedings, as the Secretary may require.
Example Output: Mandatory Foreclosure Mediation Act - Prohibits a servicer from initiating a foreclosure action against a borrower unless the servicer has: (1) made a reasonable effort to initiate mediation proceedings to determine if the borrower is eligible for a loan modification or an alternative to foreclosure; and (2) offered the borrower, if eligible, such a modification or alternative.

Requires a servicer to suspend a foreclosure action initiated before the enactment of this Act until the servicer: (1) completes such a mediation proceeding; and (2) offers the borrower, if eligible, a modification or alternative.

Prohibits a servicer, during the suspension period, from: (1) sending the borrower a notice of foreclosure, (2) conducting or scheduling a sale of the real property securing the mortgage, or (3) causing final judgment to be entered against the borrower.

Directs the Secretary of Housing and Urban Development (HUD) to establish such a mediation process.

Declares that a servicer is not required to suspend a foreclosure action if the servicer makes a reasonable effort to schedule a mediation proceeding and documents that the borrower has not agreed to one.

Makes a violation of this Act a bar to a foreclosure action. Allows a servicer in compliance with this Act, however, to bring or proceed with a foreclosure action, regardless of any prior violation.

Example Input: SECTION 1. SHORT TITLE.

    This Act may be cited as the ``Student Non-Discrimination Act of 
2011''.

SEC. 2. FINDINGS AND PURPOSES.

    (a) Findings.--The Congress finds the following:
            (1) Public school students who are lesbian, gay, bisexual 
        or transgender (LGBT), or are perceived to be LGBT, or who 
        associate with LGBT people, have been and are subjected to 
        pervasive discrimination, including harassment, bullying, 
        intimidation and violence, and have been deprived of equal 
        educational opportunities, in schools in every part of our 
        Nation.
            (2) While discrimination, including harassment, bullying, 
        intimidation and violence, of any kind is harmful to students 
        and to our education system, actions that target students based 
        on sexual orientation or gender identity represent a distinct 
        and especially severe problem.
            (3) Numerous social science studies demonstrate that 
        discrimination, including harassment, bullying, intimidation 
        and violence, at school has contributed to high rates of 
        absenteeism, dropout, adverse health consequences, and academic 
        underachievement among LGBT youth.
            (4) When left unchecked, discrimination, including 
        harassment, bullying, intimidation and violence, in schools 
        based on sexual orientation or gender identity can lead, and 
        has lead to, life-threatening violence and to suicide.
            (5) Public school students enjoy a variety of 
        constitutional rights, including rights to equal protection, 
        privacy, and free expression, which are infringed when school 
        officials engage in discriminatory treatment or are indifferent 
        to discrimination, including harassment, bullying, intimidation 
        and violence, on the basis of sexual orientation or gender 
        identity.
            (6) While Federal statutory protections expressly address 
        discrimination on the basis of race, color, sex, religion, 
        disability, and national origin, Federal civil rights statutes 
        do not expressly include ``sexual orientation'' or ``gender 
        identity''. As a result, students and parents have often had 
        limited legal recourse to redress for discrimination on the 
        basis of sexual orientation or gender identity.
    (b) Purposes.--The purposes of this Act are--
            (1) to ensure that all students have access to public 
        education in a safe environment free from discrimination, 
        including harassment, bullying, intimidation and violence, on 
        the basis of sexual orientation or gender identity;
            (2) to provide a comprehensive Federal prohibition of 
        discrimination in public schools based on actual or perceived 
        sexual orientation or gender identity;
            (3) to provide meaningful and effective remedies for 
        discrimination in public schools based on actual or perceived 
        sexual orientation or gender identity;
            (4) to invoke congressional powers, including but not 
        limited to the power to enforce the 14th Amendment to the 
        Constitution and to provide for the general welfare pursuant to 
        section 8 of article I of the Constitution and the power to 
        enact all laws necessary and proper for the execution of the 
        foregoing powers pursuant to section 8 of article I of the 
        Constitution, in order to prohibit discrimination in public 
        schools on the basis of sexual orientation or gender identity; 
        and
            (5) to allow the Department of Education to effectively 
        combat discrimination based on sexual orientation or gender 
        identity in public schools through regulation and enforcement, 
        as the Department has issued regulations under and enforced 
        title IX of the Education Amendments of 1972 and other 
        nondiscrimination laws in a manner that effectively addresses 
        discrimination.

SEC. 3. DEFINITIONS.

    For purposes of this Act:
            (1) Program or activity.--The terms ``program or activity'' 
        and ``program'' have same meanings given such terms as applied 
        under section 606 of the Civil Rights Act of 1964 (42 U.S.C. 
        2000d-4a) to the operations of public entities under paragraph 
        (2)(B) of such section.
            (2) Gender identity.--The term ``gender identity'' means 
        the gender-related identity, appearance, or mannerisms or other 
        gender-related characteristics of an individual, with or 
        without regard to the individual's designated sex at birth.
            (3) Harassment.--The term ``harassment'' means conduct that 
        is sufficiently severe, persistent, or pervasive to limit a 
        student's ability to participate in or benefit from a public 
        school education program or activity, or to create a hostile or 
        abusive educational environment at a public school, including 
        acts of verbal, nonverbal, or physical aggression, 
        intimidation, or hostility, if such conduct is based on--
                    (A) a student's actual or perceived sexual 
                orientation or gender identity; or
                    (B) the actual or perceived sexual orientation or 
                gender identity of a person or persons with whom a 
                student associates or has associated.
            (4) Public schools.--The term ``public schools'' means 
        public elementary and secondary schools, including local 
        educational agencies, educational service agencies, and State 
        educational agencies, as defined in section 9101 of the 
        Elementary and Secondary Education Act of 1965.
            (5) Sexual orientation.--The term ``sexual orientation'' 
        means homosexuality, heterosexuality, or bisexuality.
            (6) Student.--The term ``student'' means an individual who 
        is enrolled in a public school or who, regardless of official 
        enrollment status, attends classes or participates in a public 
        school's programs or educational activities.

SEC. 4. PROHIBITION AGAINST DISCRIMINATION; EXCEPTIONS.

    (a) In General.--No student shall, on the basis of actual or 
perceived sexual orientation or gender identity of such individual or 
of a person with whom the student associates or has associated, be 
excluded from participation in, or be denied the benefits of, or be 
subjected to discrimination under any program or activity receiving 
Federal financial assistance.
    (b) Harassment.--For purposes of this Act, discrimination includes, 
but is not limited to, harassment of a student on the basis of actual 
or perceived sexual orientation or gender identity of such student or 
of a person with whom the student associates or has associated.
    (c) Retaliation Prohibited.--
            (1) Prohibition.--No person shall be excluded from 
        participation in, be denied the benefits of, or be subjected to 
        discrimination, retaliation, or reprisal under any program or 
        activity receiving Federal financial assistance based on his or 
        her opposition to conduct made unlawful by this Act.
            (2) Definition.--For purposes of this subsection, 
        ``opposition to conduct made unlawful by this Act'' includes, 
        but is not limited to--
                    (A) opposition to conduct reasonably believed to be 
                made unlawful by this Act,
                    (B) any formal or informal report, whether oral or 
                written, to any governmental entity, including public 
                schools and employees thereof, regarding conduct made 
                unlawful by this Act or reasonably believed to be made 
                unlawful by this Act,
                    (C) participation in any investigation, proceeding, 
                or hearing related to conduct made unlawful by this Act 
                or reasonably believed to be made unlawful by this Act, 
                and
                    (D) assistance or encouragement provided to any 
                other person in the exercise or enjoyment of any right 
                granted or protected by this Act,
        if in the course of that expression, the person involved does 
        not purposefully provide information known to be false to any 
        public school or other governmental entity regarding a 
        violation, or alleged violation, of this Act.

SEC. 5. FEDERAL ADMINISTRATIVE ENFORCEMENT; REPORT TO CONGRESSIONAL 
              COMMITTEES.

    Each Federal department and agency which is empowered to extend 
Federal financial assistance to any education program or activity, by 
way of grant, loan, or contract other than a contract of insurance or 
guaranty, is authorized and directed to effectuate the provisions of 
section 4 of this Act with respect to such program or activity by 
issuing rules, regulations, or orders of general applicability which 
shall be consistent with achievement of the objectives of the Act 
authorizing the financial assistance in connection with which the 
action is taken. No such rule, regulation, or order shall become 
effective unless and until approved by the President. Compliance with 
any requirement adopted pursuant to this section may be effected--
            (1) by the termination of or refusal to grant or to 
        continue assistance under such program or activity to any 
        recipient as to whom there has been an express finding on the 
        record, after opportunity for hearing, of a failure to comply 
        with such requirement, but such termination or refusal shall be 
        limited to the particular political entity, or part thereof, or 
        other recipient as to whom such a finding has been made, and 
        shall be limited in its effect to the particular program, or 
        part thereof, in which such noncompliance has been so found, or
            (2) by any other means authorized by law,
except that no such action shall be taken until the department or 
agency concerned has advised the appropriate person or persons of the 
failure to comply with the requirement and has determined that 
compliance cannot be secured by voluntary means. In the case of any 
action terminating, or refusing to grant or continue, assistance 
because of failure to comply with a requirement imposed pursuant to 
this section, the head of the Federal department or agency shall file 
with the committees of the House and Senate having legislative 
jurisdiction over the program or activity involved a full written 
report of the circumstances and the grounds for such action. No such 
action shall become effective until 30 days have elapsed after the 
filing of such report.

SEC. 6. CAUSE OF ACTION.

    (a) Cause of Action.--Subject to subsection (c) of this section, an 
aggrieved individual may assert a violation of this Act in a judicial 
proceeding. Aggrieved persons may be awarded all appropriate relief, 
including but not limited to equitable relief, compensatory damages, 
cost of the action, and remedial action.
    (b) Rule of Construction.--This section shall not be construed to 
preclude an aggrieved individual from obtaining other remedies under 
any other provision of law or to require such individual to exhaust any 
administrative complaint process or notice-of-claim requirement before 
seeking redress under this section.
    (c) Statute of Limitations.--For actions brought pursuant to this 
section, the statute of limitations period shall be determined in 
accordance with section 1658(a) of title 28 of the United States Code. 
The tolling of any such limitations period shall be determined in 
accordance with the law governing actions under section 1979 of the 
Revised Statutes (42 U.S.C. 1983) in the forum State.

SEC. 7. STATE IMMUNITY.

    (a) State Immunity.--A State shall not be immune under the 11th 
Amendment to the Constitution of the United States from suit in Federal 
court for a violation of this Act.
    (b) Waiver.--A State's receipt or use of Federal financial 
assistance for any program or activity of a State shall constitute a 
waiver of sovereign immunity, under the 11th Amendment to the 
Constitution or otherwise, to a suit brought by an aggrieved individual 
for a violation of section 4 of this Act.
    (c) Remedies.--In a suit against a State for a violation of this 
Act, remedies (including remedies both at law and in equity) are 
available for such a violation to the same extent as such remedies are 
available for such a violation in the suit against any public or 
private entity other than a State.

SEC. 8. ATTORNEY'S FEES.

    Section 722(b) of the Revised Statutes (42 U.S.C. 1988(b)) is 
amended by inserting ``the Student Nondiscrimination Act of 2011,'' 
after ``Religious Land Use and Institutionalized Persons Act of 
2000,''.

SEC. 9. EFFECT ON OTHER LAWS.

    (a) Federal and State Nondiscrimination Laws.--Nothing in this Act 
shall be construed to preempt, invalidate, or limit rights, remedies, 
procedures, or legal standards available to victims of discrimination 
or retaliation under any other Federal law or law of a State or 
political subdivision of a State, including title VI of the Civil 
Rights Act of 1964 (42 U.S.C. 2000d et seq.), title IX of the Education 
Amendments of 1972 (20 U.S.C. 1681 et seq.), section 504 of the 
Rehabilitation Act of 1973 (29 U.S.C. 794), the Americans with 
Disabilities Act of 1990 (42 U.S.C. 12101 et seq.), or section 1979 of 
the Revised Statutes (42 U.S.C. 1983). The obligations imposed by this 
Act are in addition to those imposed by title IX of the Education 
Amendments of 1972 (20 U.S.C. 1681 et seq.), title VI of the Civil 
Rights Act of 1964 (42 U.S.C. 2000d et seq.), and the Americans with 
Disabilities Act of 1990 (42 U.S.C. 12101 et seq.).
    (b) Free Speech and Expression Laws and Religious Student Groups.--
Nothing in this Act shall be construed to alter legal standards 
regarding, or affect the rights available to individuals or groups 
under, other Federal laws that establish protections for freedom of 
speech and expression, such as legal standards and rights available to 
religious and other student groups under the 1st Amendment to the 
Constitution and the Equal Access Act (20 U.S.C. 4071 et seq.).

SEC. 10. SEVERABILITY.

    If any provision of this Act, or any application of such provision 
to any person or circumstance, is held to be unconstitutional, the 
remainder of this Act, and the application of the provision to any 
other person or circumstance shall not be affected.

SEC. 11. EFFECTIVE DATE.

    This Act shall take effect 60 days after the date of the enactment 
of this Act and shall not apply to conduct occurring before the 
effective date of this Act.
Example Output: Student Non-Discrimination Act of 2011 - Prohibits public school students from being excluded from participating in, or subject to discrimination under, any federally-assisted educational program on the basis of their actual or perceived sexual orientation or gender identity or that of their associates.

Considers harassment to be a form of discrimination.

Prohibits retaliation against anyone for opposing conduct they reasonably believe to be unlawful under this Act.

Authorizes federal departments and agencies to enforce these prohibitions by cutting off the educational assistance of recipients found to be violating them.

Allows an aggrieved individual to assert a violation of this Act in a judicial proceeding and recover reasonable attorney's fees should they prevail.

Deems a state's receipt of federal educational assistance for a program to constitute a waiver of sovereign immunity for conduct prohibited under this Act regarding such program.

Example Input: SECTION 1. SHORT TITLE.

    This Act may be cited as the ``Fairness for Homeowners Act of 
2007''.

SEC. 2. ORIGINATIONS OF CONSUMER CREDIT TRANSACTIONS SECURED BY THE 
              CONSUMER'S PRINCIPAL DWELLING.

    (a) In General.--The Truth in Lending Act (15 U.S.C. 1601 et seq.) 
is amended by inserting after section 129 the following new section:
``Sec. 129A. Originations of consumer credit transactions secured by 
              the consumer's principal dwelling
    ``(a) Definitions.--For purposes of this section, the following 
definitions shall apply:
            ``(1) Fully indexed rate.--The term `fully indexed rate' 
        equals the index rate prevailing at the time a consumer credit 
        transaction secured by a consumer's principal dwelling is 
        originated, plus the margin that will apply after the 
        expiration of an introductory interest rate.
            ``(2) Mortgage broker.--The term `mortgage broker' means 
        any person who is defined as a mortgage broker under applicable 
        State law.
    ``(b) Requirements for Originators.--
            ``(1) Ability to pay.--
                    ``(A) In general.--No creditor or mortgage broker 
                may make, provide, or arrange for any consumer credit 
                transaction secured by a consumer's principal dwelling 
                without verifying the consumer's reasonable ability to 
                pay the scheduled payments of the following, as 
                applicable: principal; interest; real estate taxes; 
                homeowner's insurance, assessments, and mortgage 
                insurance premiums.
                    ``(B) Variable interest rate.--In the case of any 
                consumer credit transaction secured by a consumer's 
                principal dwelling for which the applicable annual 
                percentage rate may vary over the life of the credit, 
                the reasonable ability to pay shall be determined, for 
                purposes of this paragraph, on the basis of a fully 
                indexed rate plus 200 basis points and a repayment 
                schedule which achieves full amortization over the life 
                of the extension of credit.
                    ``(C) Verification of consumer income and financial 
                resources.--In the case of any consumer credit 
                transaction secured by a consumer's principal dwelling, 
                the income and financial resources of the consumer 
                shall be verified for purposes of this paragraph by tax 
                returns, payroll receipts, bank records, or other 
                similarly reliable documents.
                    ``(D) Other criteria.--No provision of this 
                paragraph shall be construed as prohibiting reliance on 
                criteria other than a consumer's income and financial 
                resources to establish the reasonable ability of the 
                consumer to repay any consumer credit transaction 
                secured by the consumer's principal dwelling, to the 
                extent such other criteria are also verified through 
                reasonably reliable methods and documentation.
                    ``(E) Consumer statement is insufficient proof.--A 
                statement by a consumer of the consumer's income or 
                financial resources shall not be sufficient to 
                establish the existence of any income or financial 
                resources when verifying the reasonable ability of the 
                consumer to repay any consumer credit transaction 
                secured by the consumer's principal dwelling, for 
                purposes of this paragraph.
            ``(2) Prohibition on steering.--No creditor or mortgage 
        broker may make, provide, or arrange for any consumer credit 
        transaction secured by a consumer's principal dwelling that is 
        of a lower investment grade if--
                    ``(A) the consumer's credit score; or
                    ``(B) comparable underwriting data, in any case in 
                which the creditor or mortgage broker does not utilize 
                credit scoring or a credit score for the consumer is 
                unavailable,
        indicates that the borrower may qualify for a consumer credit 
        transaction, available from or through the creditor or mortgage 
        broker, that is of a higher investment grade.
            ``(3) Prohibition on prepayment penalties for arms.--
                    ``(A) In general.--In the case of any consumer 
                credit transaction secured by a consumer's principal 
                dwelling that provides for variable rates of interest 
                on the credit extended under the transaction, the 
                transaction may not contain terms under which a 
                consumer must pay a prepayment penalty for paying all 
                or part of the principal before the date on which the 
                principal is due.
                    ``(B) Exclusion for jumbo mortgages.--Subparagraph 
                (A) shall not apply to any consumer credit transaction 
                secured by a consumer's principal dwelling the 
                principal amount (as defined in subsection (c)(2)) of 
                which exceeds the maximum dollar amount limitation (for 
                a residence of the applicable size) on the amount of 
                the principal obligation of a mortgage for a 1- to 4-
                family residence that may be purchased by the Federal 
                Home Loan Mortgage Corporation, as then in effect 
                pursuant to section 305(a)(2) of the Federal Home Loan 
                Mortgage Corporation Act.
    ``(c) Limitation on Financed Points, Charges, and Fees.--
            ``(1) In general.--No creditor or mortgage broker may, in 
        connection with any consumer credit transaction secured by the 
        consumer's principal dwelling, include in the principal amount 
        of such transaction any portion of any qualified finance charge 
        in excess of the amount which is equal to 5 percent of the 
        principal amount of the transaction.
            ``(2) Definitions.--For purposes of this subsection, the 
        following definitions shall apply:
                    ``(A) Qualified finance charge.--The term 
                `qualified finance charge' means the sum of--
                            ``(i) the finance charge as determined 
                        under section 106, minus any interest and time 
                        price differential; and
                            ``(ii) all compensation paid to a mortgage 
                        broker from any source in connection with this 
                        transaction.
                    ``(B) Principal amount.--The term `principal 
                amount' means--
                            ``(i) in the case of any consumer credit 
                        transaction under an open end credit plan 
                        secured by the consumer's principal dwelling, 
                        the maximum amount of credit that may be 
                        extended under the terms of such plan as 
                        determined without taking into account any 
                        amount included in determining the finance 
                        charge under section 106; and
                            ``(ii) in the case of any other consumer 
                        credit transaction secured by a consumer's 
                        principal dwelling, the amount financed (as 
                        defined in section 138(a)(2)).
            ``(3) Prohibition on excessive finance charges.--No 
        creditor or mortgage broker may, in connection with any 
        consumer credit transaction secured by the consumer's principal 
        dwelling, impose or receive any amount included in determining 
        the qualified finance charge for such transaction that exceeds 
        the amount which is equal to 5 percent of the principal amount 
        of the transaction.
            ``(4) Exception.--This subsection shall not apply to any 
        consumer credit transaction secured by the consumer's principal 
        dwelling that is ensured or guaranteed by the Secretary of 
        Housing and Urban Development, the Secretary of Veterans 
        Affairs, or the Farmers Home Administration.
    ``(d) Mortgage Broker Duties of Agency.--
            ``(1) In general.--Any mortgage broker acting to obtain or 
        arrange for any consumer credit transaction secured by the 
        consumer's principal dwelling shall be considered to have an 
        agency relationship with the consumer in all cases by operation 
        of law and shall comply with the following duties:
                    ``(A) Mortgage brokers shall act in the consumer's 
                best interest and in the utmost good faith toward each 
                consumer and shall not compromise a consumer's right or 
                interest in favor of another's right or interest, 
                including a right or interest of the mortgage broker.
                    ``(B) A mortgage broker shall not accept, give, or 
                charge any undisclosed compensation or realize any 
                undisclosed remuneration, either through direct or 
                indirect means, that inures to the benefit of the 
                mortgage broker on an expenditure made for the 
                consumer.
                    ``(C) Mortgage brokers shall carry out all lawful 
                instructions given by the consumer.
                    ``(D) Mortgage brokers shall disclose to consumers 
                all material facts of which the mortgage broker has 
                knowledge which might reasonably affect the consumer's 
                rights, interests, or ability to receive the consumer's 
                intended benefit from the consumer credit transaction, 
                but not facts which are reasonably susceptible to the 
                knowledge of the consumer.
                    ``(E) Mortgage brokers shall use reasonable care in 
                performing duties.
                    ``(F) Mortgage brokers shall account to a consumer 
                for all the consumer's money and property received as 
                agent.
            ``(2) Scope.--The duty of agency between mortgage broker 
        and consumer applies when the mortgage broker is acting in the 
        capacity of mortgage broker providing mortgage brokerage 
        services with respect to any consumer credit transaction 
        secured by the consumer's principal dwelling for which the 
        broker is not the creditor.
            ``(3) Rules of construction.--
                    ``(A) Fees for services rendered.--No provision of 
                this subsection shall be construed as prohibiting a 
                mortgage broker from contracting for or collecting a 
                fee for services rendered which had been disclosed to 
                the consumer in advance of the provision of such 
                services.
                    ``(B) Duty of broker.--No provision of this 
                subsection shall be construed as requiring a mortgage 
                broker--
                            ``(i) to obtain or arrange for any consumer 
                        credit transaction secured by the consumer's 
                        principal dwelling on behalf of a consumer that 
                        contains terms or conditions not available to 
                        the mortgage broker in the mortgage broker's 
                        usual course of business; or
                            ``(ii) to obtain or arrange for any 
                        consumer credit transaction secured by the 
                        consumer's principal dwelling from a creditor 
                        with whom the mortgage broker does not have a 
                        business relationship.
    ``(e) Independent Verification of Consumer Counseling Before 
Refinancing Special Mortgages.--
            ``(1) In general.--No creditor or mortgage broker may make, 
        provide, or arrange for any consumer credit transaction secured 
        by the consumer's principal dwelling all or a portion of the 
        proceeds of which are used to fully or partially pay off a 
        special mortgage unless the borrower has obtained a written 
        certification from an authorized independent loan counselor 
        that the borrower has received counseling on the advisability 
        of the transaction.
            ``(2) Definitions.--For purposes of this section, the 
        following definitions shall apply:
                    ``(A) Special mortgage.--The term `special 
                mortgage' means any consumer credit transaction secured 
                by the consumer's principal dwelling that was 
                originated, subsidized, funded, or guaranteed by or 
                through a State, tribal, or local government, or 
                nonprofit organization, that bears 1 or more of the 
                following nonstandard payment terms which substantially 
                benefit the consumer:
                            ``(i) Payments vary with income.
                            ``(ii) Payments of principal or interest 
                        are not required or can be deferred under 
                        specified conditions.
                            ``(iii) Principal or interest is forgivable 
                        under specified conditions.
                            ``(iv) Either no interest or an annual 
                        interest rate of 2 percent or less is charged 
                        in connection with the loan.
                    ``(B) Authorized loan counselor.--The term 
                `authorized independent loan counselor' means any 
                nonprofit, third-party individual or organization 
                providing homebuyer education programs, foreclosure 
                prevention services, mortgage loan counseling, or 
                credit counseling that is certified by the Secretary of 
                Housing and Urban Development, or certified by any 
                State housing agency or nonprofit organization 
                designated by such Secretary, for such purposes.
    ``(f) Minimum Financial Requirements for Mortgage Brokers.--No 
mortgage broker may obtain or arrange for any consumer credit 
transaction secured by the consumer's principal dwelling unless at all 
times the mortgage broker--
            ``(1) maintains a minimum net worth, net of intangibles, of 
        at least $500,000, as determined in accordance with generally 
        accepted accounting principles; or
            ``(2) maintains a surety bond or irrevocable letter of 
        credit in the amount of $50,000.
    ``(g) Enforcement.--For purposes of providing a cause of action for 
any failure by a mortgage broker to comply with any requirement imposed 
under this section, section 130(a) shall be applied with respect to any 
such failure--
            ``(1) by substituting `mortgage broker' for `creditor' each 
        place such term appears in such section; and
            ``(2) by treating all qualified finance charges (as defined 
        in subsection (c)(2)(A)) incurred in the origination of any 
        consumer credit transaction secured by the consumer's principal 
        dwelling as actual damages sustained by the consumer as a 
        result of the failure.
    ``(h) Exclusion of Reverse Mortgages.--This section shall not apply 
with respect to any consumer mortgage transaction that constitutes a 
reverse mortgage.''.
    (b) Technical and Conforming Amendments.--The Truth in Lending Act 
is amended--
            (1) in section 103 (u) (15 U.S.C. 1602(u)), by striking 
        ``and the disclosures required by section 129(a)'' and 
        inserting ``and the provisions of section 129 and 129A''; and
            (2) in section 130 (15 U.S.C. 1640), by inserting ``or 
        129A'' after section 129 each place such term appears.
    (c) 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 following new item:

``129A. Originations of consumer credit transactions secured by the 
                            consumer's principal dwelling.''.
Example Output:
Fairness for Homeowners Act of 2007 - Amends the Truth in Lending Act to prohibit any creditor or mortgage broker from making, providing, or arranging for any consumer credit transaction secured by a consumer's principal dwelling without verifying the consumer's reasonable ability to make the scheduled payments of principal, interest (including variable interest), real estate taxes, homeowner's insurance, assessments, and mortgage insurance premiums.

Prescribes criteria for determining the reasonable ability to make such payments.

Prohibits steering (arranging for a lower investment grade credit transaction if the consumer qualifies for a higher investment grade transaction) and prepayment penalties for adjustable rate mortgages (ARMs) that are not jumbo mortgages.

Limits financed points, finance charges, and fees to 5% of a transaction's principal, unless the transaction is ensured or guaranteed by the Secretary of Housing and Urban Development, the Secretary of Veterans Affairs, or the Farmers Home Administration.

Specifies duties of agency for mortgage brokers acting to obtain or arrange for any consumer credit transaction secured by the consumer's principal dwelling.

Requires creditors and mortgage brokers to obtain independent verification that a borrower seeking to refinance a special mortgage has received counseling on the transaction's advisability. Defines "special mortgage" as one that: (1) was originated, subsidized, funded, or guaranteed by or through a state, tribal, or local government, or nonprofit organization; and (2) bears one or more specified nonstandard payment terms which substantially benefit the consumer.

Prescribes minimum financial requirements for mortgage brokers.

Excludes reverse mortgages from coverage by this Act.