		IIB
		111th CONGRESS
		1st Session
		H. R. 1728
		IN THE SENATE OF THE UNITED
		  STATES

			May 12, 2009
			Received; read twice and referred to the
			 Committee on Banking, Housing, and Urban
			 Affairs

		AN ACT
		To amend the Truth in Lending Act to reform
		  consumer mortgage practices and provide accountability for such practices, to
		  provide certain minimum standards for consumer mortgage loans, and for other
		  purposes.

		1.Short title; table of
			 contents
			(a)Short
			 titleThis Act may be cited
			 as the Mortgage Reform and
			 Anti-Predatory Lending Act.
			(b)Table of
			 contentsThe table of contents for this Act is as follows:

					Sec. 1. Short title; table of contents.
					Title I—Residential Mortgage Loan Origination
				Standards
					Sec. 101. Definitions.
					Sec. 102. Residential mortgage loan origination.
					Sec. 103. Prohibition on steering incentives.
					Sec. 104. Liability.
					Sec. 105. Regulations.
					Sec. 106. RESPA and TILA disclosure improvement.
					Sec. 107. Study of shared appreciation mortgages.
					Title II—Minimum Standards For Mortgages
					Sec. 201. Ability to repay.
					Sec. 202. Net tangible benefit for refinancing of residential
				mortgage loans.
					Sec. 203. Safe harbor and rebuttable presumption.
					Sec. 204. Liability.
					Sec. 205. Defense to foreclosure.
					Sec. 206. Additional standards and requirements.
					Sec. 207. Rule of construction.
					Sec. 208. Effect on State laws.
					Sec. 209. Regulations.
					Sec. 210. Amendments to civil liability provisions.
					Sec. 211. Lender rights in the context of borrower
				deception.
					Sec. 212. Six-month notice required before reset of hybrid
				adjustable rate mortgages.
					Sec. 213. Credit risk retention.
					Sec. 214. Required disclosures.
					Sec. 215. Disclosures required in monthly statements for
				residential mortgage loans.
					Sec. 216. Legal assistance for foreclosure-related
				issues.
					Sec. 217. Effective date.
					Sec. 218. Report by the GAO.
					Sec. 219. State Attorney General enforcement
				authority.
					Sec. 220. Tenant protection.
					Title III—High-Cost Mortgages
					Sec. 301. Definitions relating to high-cost
				mortgages.
					Sec. 302. Amendments to existing requirements for certain
				mortgages.
					Sec. 303. Additional requirements for certain
				mortgages.
					Sec. 304. Regulations.
					Sec. 305. Effective date.
					Title IV—Office of Housing Counseling
					Sec. 401. Short title.
					Sec. 402. Establishment of Office of Housing
				Counseling.
					Sec. 403. Counseling procedures.
					Sec. 404. Grants for housing counseling assistance.
					Sec. 405. Requirements to use HUD-certified counselors under
				HUD programs.
					Sec. 406. Study of defaults and foreclosures.
					Sec. 407. Default and foreclosure database.
					Sec. 408. Definitions for counseling-related
				programs.
					Sec. 409. Accountability and transparency for grant
				recipients.
					Sec. 410. Updating and simplification of mortgage information
				booklet.
					Sec. 411. Home inspection counseling.
					Sec. 412. Warnings to homeowners of foreclosure rescue
				scams.
					Title V—Mortgage Servicing
					Sec. 501. Escrow and impound accounts relating to certain
				consumer credit transactions.
					Sec. 502. Disclosure notice required for consumers who waive
				escrow services.
					Sec. 503. Real Estate Settlement Procedures Act of 1974
				amendments.
					Sec. 504. Truth in Lending Act amendments.
					Sec. 505. Escrows included in repayment analysis.
					Title VI—Appraisal Activities
					Sec. 601. Property appraisal requirements.
					Sec. 602. Unfair and deceptive practices and acts relating to
				certain consumer credit transactions.
					Sec. 603. Amendments relating to Appraisal Subcommittee of
				FIEC, Appraiser Independence Monitoring, Approved Appraiser Education,
				Appraisal Management Companies, Appraiser Complaint Hotline, Automated
				Valuation Models, and Broker Price Opinions.
					Sec. 604. Study required on improvements in appraisal process
				and compliance programs.
					Sec. 605. Equal Credit Opportunity Act amendment.
					Sec. 606. Real Estate Settlement Procedures Act of 1974
				amendment relating to certain appraisal fees.
					Title VII—Sense of Congress regarding the importance of
				government sponsored enterprises reform
					Sec. 701. Sense of Congress regarding the importance of
				Government-sponsored enterprises reform to enhance the protection, limitation,
				and regulation of the terms of residential mortgage credit.
					Title VIII—Reports
					Sec. 801. GAO study report on government efforts to combat
				mortgage foreclosure rescue scams and loan modification fraud.
					Title IX—Multifamily mortgage resolution
					Sec. 901. Multifamily mortgage resolution program.
					Title X—Study of effect of drywall presence on
				foreclosures
					Sec. 1001. Study of effect of drywall presence on
				foreclosures.
					Title XI—Fannie Mae guidelines for purchase of condominium and
				cooperative housing mortgages
					Sec. 1101. Guidelines for purchase of condominium and
				cooperative housing mortgages.

			IResidential
			 Mortgage Loan Origination Standards
			101.DefinitionsSection 103 of the Truth in Lending Act (15
			 U.S.C. 1602) is amended by adding at the end the following new
			 subsection:

					(cc)Definitions
				relating to mortgage origination and residential mortgage loans
						(1)CommissionUnless
				otherwise specified, the term Commission means the Federal Trade
				Commission.
						(2)Federal banking
				agenciesThe term
				Federal banking agencies means the Board of Governors of the
				Federal Reserve System, the Comptroller of the Currency, the Director of the
				Office of Thrift Supervision, the Federal Deposit Insurance Corporation, and
				the National Credit Union Administration Board. All rule writing by the
				Federal banking agencies as designated by the Mortgage Reform
				and Anti-Predatory Lending Act will be coordinated through the Financial
				Institutions Examination Council in consultation with the Chairman of the State
				Liaison Committee.
						(3)Mortgage
				originatorThe term mortgage originator—
							(A)means any person who, for direct or
				indirect compensation or gain, or in the expectation of direct or indirect
				compensation or gain—
								(i)takes a
				residential mortgage loan application;
								(ii)assists a
				consumer in obtaining or applying to obtain a residential mortgage loan;
				or
								(iii)offers or negotiates terms of a residential
				mortgage loan;
								(B)includes any person who represents to the
				public, through advertising or other means of communicating or providing
				information (including the use of business cards, stationery, brochures, signs,
				rate lists, or other promotional items), that such person can or will provide
				any of the services or perform any of the activities described in subparagraph
				(A);
							(C)does not include any person who is (i) not
				otherwise described in subparagraph (A) or (B) and who performs purely
				administrative or clerical tasks on behalf of a person who is described in any
				such subparagraph, or (ii) an employee of a retailer of manufactured homes who
				is not described in clause (i) or (iii) of subparagraph (A) and who does not
				advise a consumer on loan terms (including rates, fees, and other
				costs);
							(D)does not include a person or entity that
				only performs real estate brokerage activities and is licensed or registered in
				accordance with applicable State law, unless such person or entity is
				compensated for performing such brokerage activities by a lender, a mortgage
				broker, or other mortgage originator or by any agent of such lender, mortgage
				broker, or other mortgage originator;
							(E)does not include, with respect to a
				residential mortgage loan, a person, estate, or trust that provides mortgage
				financing for the sale of 1 property in any 36-month period, provided that such
				loan—
								(i)is
				fully amortizing;
								(ii)is with respect
				to a sale for which the seller determines in good faith and documents that the
				buyer has a reasonable ability to repay the loan;
								(iii)has a fixed rate
				or an adjustable rate that is adjustable after 5 or more years, subject to
				reasonable annual and lifetime limitations on interest rate increases;
				and
								(iv)meets any other
				criteria the Federal banking agencies may prescribe; and
								(F)does not include a servicer or servicer
				employees, agents and contractors, including but not limited to those who offer
				or negotiate terms of a residential mortgage loan for purposes of
				renegotiating, modifying, replacing and subordinating principal of existing
				mortgages where borrowers are behind in their payments, in default or have a
				reasonable likelihood of being in default or falling behind.
							(4)Nationwide
				Mortgage Licensing System and RegistryThe term Nationwide Mortgage
				Licensing System and Registry has the same meaning as in the Secure and
				Fair Enforcement for Mortgage Licensing Act of 2008.
						(5)Other
				definitions relating to mortgage originatorFor purposes of this subsection, a person
				assists a consumer in obtaining or applying to obtain a residential
				mortgage loan by, among other things, advising on residential mortgage
				loan terms (including rates, fees, and other costs), preparing residential
				mortgage loan packages, or collecting information on behalf of the consumer
				with regard to a residential mortgage loan.
						(6)Residential
				mortgage loanThe term
				residential mortgage loan means any consumer credit transaction
				that is secured by a mortgage, deed of trust, or other equivalent consensual
				security interest on a dwelling or on residential real property that includes a
				dwelling, other than a consumer credit transaction under an open end credit
				plan or a reverse mortgage or, for purposes of sections 129B and 129C and
				section 128(a) (16), (17), and (18), and 128(f) and any regulations promulgated
				thereunder, an extension of credit relating to a plan described in section
				101(53D) of title 11, United States Code.
						(7)SecretaryThe
				term Secretary, when used in connection with any transaction or
				person involved with a residential mortgage loan, means the Secretary of
				Housing and Urban Development.
						(8)Securitization
				vehicleThe term
				securitization vehicle means a trust, corporation, partnership,
				limited liability entity, special purpose entity, or other structure
				that—
							(A)is the issuer, or
				is created by the issuer, of mortgage pass-through certificates, participation
				certificates, mortgage-backed securities, or other similar securities backed by
				a pool of assets that includes residential mortgage loans; and
							(B)holds such
				loans.
							(9)SecuritizerThe term securitizer means the
				person that transfers, conveys, or assigns, or causes the transfer, conveyance,
				or assignment of, residential mortgage loans, including through a special
				purpose vehicle, to any securitization vehicle, excluding any trustee that
				holds such loans solely for the benefit of the securitization vehicle.
						(10)ServicerThe term servicer has the same
				meaning as in section 6(i)(2) of the Real Estate Settlement Procedures Act of
				1974.
						.
			102.Residential mortgage
			 loan origination
				(a)In
			 generalChapter 2 of the Truth in Lending Act (15 U.S.C. 1631 et
			 seq.) is amended by inserting after section 129A the following new
			 section:

						129B.Residential
				mortgage loan origination
							(a)Finding and
				purpose
								(1)FindingThe
				Congress finds that economic stabilization would be enhanced by the protection,
				limitation, and regulation of the terms of residential mortgage credit and the
				practices related to such credit, while ensuring that responsible, affordable
				mortgage credit remains available to consumers.
								(2)PurposeIt
				is the purpose of this section and section 129C to assure that consumers are
				offered and receive residential mortgage loans on terms that reasonably reflect
				their ability to repay the loans and that are understandable and not unfair,
				deceptive or abusive.
								(b)Duty of
				care
								(1)StandardSubject to regulations prescribed under
				this subsection, each mortgage originator shall, in addition to the duties
				imposed by otherwise applicable provisions of State or Federal law—
									(A)be qualified and, when required, registered
				and licensed as a mortgage originator in accordance with applicable State or
				Federal law, including the Secure and Fair Enforcement for Mortgage Licensing
				Act of 2008;
									(B)with respect to each consumer seeking or
				inquiring about a residential mortgage loan, diligently work to present the
				consumer with a range of residential mortgage loan products for which the
				consumer likely qualifies and which are appropriate to the consumer’s existing
				circumstances, based on information known by, or obtained in good faith by, the
				originator;
									(C)make full, complete, and timely disclosure
				to each such consumer in writing, the receipt and understanding of which shall
				be acknowledged by the signature of the mortgage originator and the consumer,
				of—
										(i)the comparative costs and benefits of each
				residential mortgage loan product offered, discussed, or referred to by the
				originator (and such comparative costs and benefits for each such product shall
				be presented side by side and the disclosures for each such product shall have
				equal prominence);
										(ii)the nature of the
				originator’s relationship to the consumer (including the cost of the services
				to be provided by the originator and a statement that the mortgage originator
				is or is not acting as an agent for the consumer, as the case may be);
				and
										(iii)any relevant
				conflicts of interest between the originator and the consumer;
										(D)certify to the creditor, with respect to
				any transaction involving a residential mortgage loan, that the mortgage
				originator has fulfilled all requirements applicable to the originator under
				this section with respect to the transaction; and
									(E)include on all loan documents any unique
				identifier of the mortgage originator provided by the Nationwide Mortgage
				Licensing System and Registry.
									(2)Clarification of
				extent of duty to present range of products and appropriate products
									(A)No duty to offer
				products for which originator is not authorized to take an
				applicationParagraph (1)(B) shall not be construed as
				requiring—
										(i)a
				mortgage originator to present to any consumer any specific residential
				mortgage loan product that is offered by a creditor which does not accept
				consumer referrals from, or consumer applications submitted by or through, such
				originator; or
										(ii)a
				creditor to offer products that the creditor does not offer to the general
				public.
										(B)Appropriate loan
				productFor purposes of
				paragraph (1)(B), a residential mortgage loan shall be presumed to be
				appropriate for a consumer if—
										(i)the mortgage originator determines in good
				faith, based on then existing information and without undergoing a full
				underwriting process, that the consumer has a reasonable ability to repay and,
				in the case of a refinancing of an existing residential mortgage loan, receives
				a net tangible benefit, as determined in accordance with regulations prescribed
				under subsections (a) and (b) of section 129C; and
										(ii)the loan does not have predatory
				characteristics or effects (such as equity stripping and excessive fees and
				abusive terms) as determined in accordance with regulations prescribed under
				paragraph (4).
										(3)Rules of
				constructionNo provision of
				this subsection shall be construed as—
									(A)creating an agency
				or fiduciary relationship between a mortgage originator and a consumer if the
				originator does not hold himself or herself out as such an agent or fiduciary;
				or
									(B)restricting a
				mortgage originator from holding himself or herself out as an agent or
				fiduciary of a consumer subject to any additional duty, requirement, or
				limitation applicable to agents or fiduciaries under any Federal or State
				law.
									(4)Regulations
									(A)In
				generalThe Federal banking
				agencies, in consultation with the Secretary, and the Commission, shall jointly
				prescribe regulations to—
										(i)further define the
				duty established under paragraph (1);
										(ii)implement the
				requirements of this subsection;
										(iii)establish the
				time period within which any disclosure required under paragraph (1) shall be
				made to the consumer; and
										(iv)establish such
				other requirements for any mortgage originator as such regulatory agencies may
				determine to be appropriate to meet the purposes of this subsection.
										(B)Complementary
				and nonduplicative disclosuresThe agencies referred to in subparagraph
				(A) shall endeavor to make the required disclosures to consumers under this
				subsection complementary and nonduplicative with other disclosures for mortgage
				consumers to the extent such efforts—
										(i)are practicable;
				and
										(ii)do not reduce the
				value of any such disclosure to recipients of such disclosures.
										(5)Compliance
				procedures requiredThe
				Federal banking agencies shall prescribe regulations requiring depository
				institutions to establish and maintain procedures reasonably designed to assure
				and monitor the compliance of such depository institutions, the subsidiaries of
				such institutions, and the employees of such institutions or subsidiaries with
				the requirements of this section and the registration procedures established
				under section 1507 of the Secure and Fair Enforcement for Mortgage Licensing
				Act of
				2008.
								.
				(b)Clerical
			 amendmentThe 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 items:

							129A. Fiduciary duty of servicers of
				pooled residential mortgages.
							129B. Residential mortgage loan
				origination.

						.
				103.Prohibition on
			 steering incentivesSection
			 129B of the Truth in Lending Act (as added by section 102(a)) is amended by
			 inserting after subsection (b) the following new subsection:

					(c)Prohibition on
				steering incentives
						(1)In
				generalFor any mortgage
				loan, the total amount of direct and indirect compensation from all sources
				permitted to a mortgage originator may not vary based on the terms of the loan
				(other than the amount of the principal).
						(2)Restructuring of
				financing origination fee
							(A)In
				generalFor any mortgage
				loan, a mortgage originator may not arrange for a consumer to finance through
				rate any origination fee or cost except bona fide third party settlement
				charges not retained by the creditor or mortgage originator.
							(B)ExceptionNotwithstanding
				paragraph subparagraph (A), a mortgage originator may arrange for a consumer to
				finance through rate an origination fee or cost if—
								(i)the mortgage
				originator does not receive any other compensation from the consumer except the
				compensation that is financed through rate; and
								(ii)the mortgage is a
				qualified mortgage.
								(3)RegulationsThe Federal banking agencies, in
				consultation with the Secretary and the Commission, shall jointly prescribe
				regulations to prohibit—
							(A)mortgage
				originators from steering any consumer to a residential mortgage loan
				that—
								(i)the consumer lacks a reasonable ability to
				repay (in accordance with regulations prescribed under section 129C(a));
								(ii)in the case of a refinancing of a
				residential mortgage loan, does not provide the consumer with a net tangible
				benefit (in accordance with regulations prescribed under section 129C(b));
				or
								(iii)has predatory
				characteristics or effects (such as equity stripping, excessive fees, or
				abusive terms);
								(B)mortgage originators from steering any
				consumer from a residential mortgage loan for which the consumer is qualified
				that is a qualified mortgage (as defined in section 129C(c)(3)) to a
				residential mortgage loan that is not a qualified mortgage;
							(C)abusive or unfair lending practices that
				promote disparities among consumers of equal credit worthiness but of different
				race, ethnicity, gender, or age;
							(D)mortgage originators from assessing
				excessive points and fees (as such term is described under section 103(aa)(4)
				of the Truth in Lending Act (15 U.S.C. 1602(aa)(4))) to a consumer for the
				origination of a residential mortgage loan based on such consumer’s decision to
				finance all or part of the payment through the rate for such points and fees;
				and
							(E)mortgage originators from—
								(i)mischaracterizing the credit history of a
				consumer or the residential mortgage loans available to a consumer;
								(ii)mischaracterizing or suborning the
				mischaracterization of the appraised value of the property securing the
				extension of credit; or
								(iii)if unable to suggest, offer, or recommend
				to a consumer a loan that is not more expensive than a loan for which the
				consumer qualifies, discouraging a consumer from seeking a home mortgage loan
				secured by a consumer’s principal dwelling from another mortgage
				originator.
								(4)Rules of
				constructionNo provision of this subsection shall be construed
				as—
							(A)permitting yield spread premiums or other
				similar incentive compensation;
							(B)affecting the mechanism for providing the
				total amount of direct and indirect compensation permitted to a mortgage
				originator;
							(C)limiting or affecting the amount of
				compensation received by a creditor upon the sale of a consummated loan to a
				subsequent purchaser;
							(D)restricting a consumer’s ability to
				finance, including through principal, any origination fees or costs permitted
				under this subsection, or the mortgage originator’s ability to receive such
				fees or costs (including compensation) from any person, so long as such fees or
				costs were fully and clearly disclosed to the consumer earlier in the
				application process as required by 129B(b)(1)(C)(i) and do not vary based on
				the terms of the loan (other than the amount of the principal) or the
				consumer’s decision about whether to finance such fees or costs; or
							(E)prohibiting
				incentive payments to a mortgage originator based on the number of residential
				mortgage loans originated within a specified period of
				time.
							.
			104.LiabilitySection 129B of the Truth in Lending Act is
			 amended by inserting after subsection (c) (as added by section 103) the
			 following new subsection:

					(d)Liability for
				violations
						(1)In
				generalFor purposes of providing a cause of action for any
				failure by a mortgage originator to comply with any requirement imposed under
				this section and any regulation prescribed under this section, subsections (a)
				and (b) of section 130 shall be applied with respect to any such failure by
				substituting mortgage originator for creditor each
				place such term appears in each such subsection.
						(2)MaximumThe maximum amount of any liability of a
				mortgage originator under paragraph (1) to a consumer for any violation of this
				section shall not exceed the greater of actual damages or an amount equal to 3
				times the total amount of direct and indirect compensation or gain accruing to
				the mortgage originator in connection with the residential mortgage loan
				involved in the violation, plus the costs to the consumer of the action,
				including a reasonable attorney’s
				fee.
						.
			105.Regulations
				(a)Discretionary
			 regulatory authoritySection
			 129B of the Truth in Lending Act is amended by inserting after subsection (d)
			 (as added by section 104) the following new subsection:

						(e)Discretionary
				regulatory authority
							(1)In
				generalThe Federal banking
				agencies shall, by regulations issued jointly, prohibit or condition terms,
				acts or practices relating to residential mortgage loans that the agencies find
				to be abusive, unfair, deceptive, predatory, inconsistent with reasonable
				underwriting standards, necessary or proper to ensure that responsible,
				affordable mortgage credit remains available to consumers in a manner
				consistent with the purposes of this section and section 129B, necessary or
				proper to effectuate the purposes of this section and section 129C, to prevent
				circumvention or evasion thereof, or to facilitate compliance with such
				sections, or are not in the interest of the borrower.
							(2)ApplicationThe
				regulations prescribed under paragraph (1) shall be applicable to all
				residential mortgage loans and shall be applied in the same manner as
				regulations prescribed under section 105.
							(f)Section 129B and
				any regulations promulgated thereunder do not apply to an extension of credit
				relating to a plan described in section 101(53D) of title 11, United States
				Code.
						.
				(b)Effective
			 dateThe regulations required
			 or authorized to be prescribed under this title or the amendments made by this
			 title—
					(1)shall be
			 prescribed in final form before the end of the 12-month period beginning on the
			 date of the enactment of this Act; and
					(2)shall take effect
			 not later than 18 months after the date of the enactment of this Act.
					(c)Truth in Lending
			 final ruleNotwithstanding
			 any other provision of this Act, the regulations adopted by the Board
			 concerning Truth in Lending, 73 Fed. Reg. 44522 (July 30, 2008), shall take
			 effect as decided by the Board with such exceptions or revisions as the Board
			 determines necessary.
				(d)Technical and
			 conforming amendmentsSection 129(l)(2) of the Truth in Lending
			 Act (15 U.S.C. 1639(l)(2)) is amended by inserting referred to in
			 section 103(aa) after loans each place such term
			 appears.
				106.RESPA and TILA
			 disclosure improvement
				(a)Compatible
			 disclosuresThe Secretary of
			 Housing and Urban Development and the Board of Governors of the Federal Reserve
			 shall, not later than the expiration of the 6-month period beginning upon the
			 date of the enactment of this Act, jointly issue for public comment proposed
			 regulations providing for compatible disclosures for borrowers to receive at
			 the time of mortgage application and at the time of closing.
				(b)RequirementsSuch
			 disclosures shall—
					(1)provide clear and
			 concise information to borrowers on the terms and costs of residential mortgage
			 transactions and mortgage transactions covered by the Truth in Lending Act (12
			 U.S.C. 1601 et seq.) and the Real Estate Settlement Procedures Act of 1974 (12
			 U.S.C. 2601 et seq.);
					(2)satisfy the
			 requirements of section 128 of the Truth in Lending Act (12 U.S.C. 1638) and
			 section 4 and 5 of the Real Estate Settlement Procedures Act of 1974;
			 and
					(3)comprise early disclosures under the Truth
			 in Lending Act and the good faith estimate disclosures under the Real Estate
			 Settlement Procedures Act of 1974 and final Truth in Lending Act disclosures
			 and the uniform settlement statement disclosures under Real Estate Settlement
			 Procedures Act of 1974 and provide for standardization to the greatest extent
			 possible among such disclosures from mortgage origination through the mortgage
			 settlement.
					(4)shall include,
			 with respect to a residential home mortgage loan, a written statement
			 of—
						(A)the principal amount of the loan;
						(B)the term of the
			 loan;
						(C)whether the loan
			 has a fixed rate of interest or an adjustable rate of interest;
						(D)the annual
			 percentage rate of interest under the loan as of the time of the
			 disclosure;
						(E)if the rate of
			 interest under the loan can adjust after the disclosure, for each such possible
			 adjustment—
							(i)when
			 such adjustment will or may occur; and
							(ii)the
			 maximum annual percentage rate of interest to which it can be adjusted;
							(F)the total monthly
			 payment under the loan (including loan principal and interest, property taxes,
			 and insurance) at the time of the disclosure;
						(G)the maximum total
			 estimated monthly maximum payment pursuant to each such possible
			 adjustment;
						(H)the total
			 settlement charges in connection with the loan and the amount of any
			 downpayment and cash required at settlement; and
						(I)whether or not the
			 loan has a prepayment penalty or balloon payment and the terms, timing, and
			 amount of any such penalty or payment.
						(c)Suspension of
			 2008 RESPA rule
					(1)RequirementThe Secretary of Housing and Urban
			 Development shall, during the period beginning on the date of the enactment of
			 this Act and ending upon issuance of proposed regulations pursuant to
			 subsection (a), suspend implementation of any provisions of the final rule
			 referred to in paragraph (2) that would establish and implement a new
			 standardized good faith estimate and a new standardized uniform settlement
			 statement. Any such provisions shall be replaced by the regulations issued
			 pursuant to subsections (a) and (b).
					(2)2008
			 ruleThe final rule referred
			 to in this paragraph is the rule of the Department of Housing and Urban
			 Development published on November 17, 2008, on pages 68204–68288 of Volume 73
			 of the Federal Register (Docket No. FR–5180–F–03; relating to Real
			 Estate Settlement Procedures Act (RESPA): Rule to Simplify and Improve the
			 Process of Obtaining Mortgages and Reduce Consumer Settlement
			 Costs).
					(d)ImplementationThe
			 regulations required under subsection (a) shall take effect, and shall provide
			 an implementation date for the new disclosures required under such regulations,
			 not later than the expiration of the 12-month period beginning upon the date of
			 the enactment of this Act.
				(e)Failure To issue
			 compatible disclosuresIf the
			 Secretary of Housing and Urban Development and the Board of Governors of the
			 Federal Reserve System cannot agree on compatible disclosures pursuant to
			 subsections (a) and (b), the Secretary and the Board shall submit a report to
			 the Congress, after the 6-month period referred to in subsection (a),
			 explaining the reasons for such disagreement. After the 15-day period beginning
			 upon submission of such report, the Secretary and the Board may separately
			 issue for public comment regulations providing for disclosures under the Real
			 Estate Settlement Procedures Act of 1974 and the Truth in Lending Act,
			 respectively. Any final disclosures as a result of such regulations issued by
			 the Secretary and the Board shall take effect on the same date, and not later
			 than the expiration of the 12-month period beginning on the date of the
			 enactment of this Act. If either the Secretary or the Board fails to act during
			 such 12-month period, either such agency may act independently and implement
			 final regulations.
				(f)Standardized
			 disclosure forms
					(1)In
			 generalAny regulations proposed or issued pursuant to the
			 requirements of this section shall include model disclosure forms.
					(2)Option for
			 mandatory useIn issuing
			 proposed regulations under subsection (a), the Secretary of Housing and Urban
			 Development and the Board of Governors of the Federal Reserve System shall
			 include regulations for the mandatory use of standardized disclosure forms if
			 they jointly determine that it would substantially benefit the consumer.
					107.Study of shared
			 appreciation mortgages
				(a)StudyThe Secretary of Housing and Urban
			 Development, in consultation with the Secretary of the Treasury and other
			 relevant agencies, shall conduct a comprehensive study to determine prudent
			 statutory and regulatory requirements sufficient to provide for the widespread
			 use of shared appreciation mortgages to strengthen local housing markets,
			 provide new opportunities for affordable homeownership, and enable homeowners
			 at-risk of foreclosure to refinance or modify their mortgages.
				(b)ReportNot
			 later than the expiration of the 6-month period beginning on the date of the
			 enactment of this Act, the Secretary of Housing and Urban Development shall
			 submit a report to the Congress on the results of the study, which shall
			 include recommendations for the regulatory and legislative requirements
			 referred to in subsection (a).
				IIMinimum Standards
			 For Mortgages
			201.Ability to
			 repay
				(a)In
			 generalChapter 2 of the
			 Truth in Lending Act (15 U.S.C. 1631 et seq.) is amended by inserting after
			 section 129B (as added by section 102(a)) the following new section:

						129C.Minimum
				standards for residential mortgage loans
							(a)Ability To
				repay
								(1)In
				generalIn accordance with
				regulations prescribed jointly by the Federal banking agencies, in consultation
				with the Commission, no creditor may make a residential mortgage loan unless
				the creditor makes a reasonable and good faith determination based on verified
				and documented information that, at the time the loan is consummated, the
				consumer has a reasonable ability to repay the loan, according to its terms,
				and all applicable taxes, insurance, and assessments.
								(2)Multiple
				loansIf the creditor knows,
				or has reason to know, that 1 or more residential mortgage loans secured by the
				same dwelling will be made to the same consumer, the creditor shall make a
				reasonable and good faith determination, based on verified and documented
				information, that the consumer has a reasonable ability to repay the combined
				payments of all loans on the same dwelling according to the terms of those
				loans and all applicable taxes, insurance, and assessments.
								(3)Basis for
				determinationA determination under this subsection of a
				consumer’s ability to repay a residential mortgage loan shall include
				consideration of the consumer’s credit history, current income, expected income
				the consumer is reasonably assured of receiving, current obligations,
				debt-to-income ratio, employment status, and other financial resources other
				than the consumer’s equity in the dwelling or real property that secures
				repayment of the loan.
								(4)Income
				verificationIn order to
				safeguard against fraudulent reporting, any consideration of a consumer's
				income history in making a determination under this subsection shall include
				the verification of such income by the use of—
									(A)Internal Revenue Service transcripts of tax
				returns provided by a third party; or
									(B)such other similar
				method that quickly and effectively verifies income documentation by a third
				party as the Federal banking agencies may jointly prescribe.
									(5)Nonstandard
				loans
									(A)Variable rate
				loans that defer repayment of any principal or interestFor purposes of determining, under this
				subsection, a consumer’s ability to repay a variable rate residential mortgage
				loan that allows or requires the consumer to defer the repayment of any
				principal or interest, the creditor shall use a fully amortizing repayment
				schedule.
									(B)Interest-only
				loansFor purposes of
				determining, under this subsection, a consumer’s ability to repay a residential
				mortgage loan that permits or requires the payment of interest only, the
				creditor shall use the payment amount required to amortize the loan by its
				final maturity.
									(C)Calculation for
				negative amortizationIn
				making any determination under this subsection, a creditor shall also take into
				consideration any balance increase that may accrue from any negative
				amortization provision.
									(D)Calculation
				processFor purposes of
				making any determination under this subsection, a creditor shall calculate the
				monthly payment amount for principal and interest on any residential mortgage
				loan by assuming—
										(i)the loan proceeds
				are fully disbursed on the date of the consummation of the loan;
										(ii)the loan is to be repaid in substantially
				equal monthly amortizing payments for principal and interest over the entire
				term of the loan with no balloon payment, unless the loan contract requires
				more rapid repayment (including balloon payment), in which case the calculation
				shall be made (I) in accordance with regulations prescribed by the Federal
				banking agencies, with respect to any loan which has an annual percentage rate
				that does not exceed the average prime offer rate for a comparable transaction,
				as of the date the interest rate is set, by 1.5 or more percentage points for a
				first lien residential mortgage loan; and by 3.5 or more percentage points for
				a subordinate lien residential mortgage loan; or (II) using the contract’s
				repayment schedule, with respect to a loan which has an annual percentage rate,
				as of the date the interest rate is set, that is at least 1.5 percentage points
				above the average prime offer rate for a first lien residential mortgage loan;
				and 3.5 percentage points above the average prime offer rate for a subordinate
				lien residential mortgage loan; and
										(iii)the interest
				rate over the entire term of the loan is a fixed rate equal to the fully
				indexed rate at the time of the loan closing, without considering the
				introductory rate.
										(E)Refinance of
				hybrid loans with current lenderIn considering any application for
				refinancing an existing hybrid loan by the creditor into a standard loan to be
				made by the same creditor in any case in which the sole net-tangible benefit to
				the mortgagor would be a reduction in monthly payment and the mortgagor has not
				been delinquent on any payment on the existing hybrid loan, the creditor
				may—
										(i)consider the
				mortgagor’s good standing on the existing mortgage;
										(ii)consider if the
				extension of new credit would prevent a likely default should the original
				mortgage reset and give such concerns a higher priority as an acceptable
				underwriting practice; and
										(iii)offer rate
				discounts and other favorable terms to such mortgagor that would be available
				to new customers with high credit ratings based on such underwriting
				practice.
										(6)Fully-indexed
				rate definedFor purposes of
				this subsection, the term fully indexed rate means the index rate
				prevailing on a residential mortgage loan at the time the loan is made plus the
				margin that will apply after the expiration of any introductory interest
				rates.
								.
				(b)Clerical
			 amendmentThe table of sections for chapter 2 of the Truth in
			 Lending Act is amended by inserting after the item relating to section 129B (as
			 added by section 102(b)) the following new item:

							129C. Minimum standards for residential
				mortgage
				loans.

						.
				202.Net tangible
			 benefit for refinancing of residential mortgage loansSection 129C of the Truth in Lending Act (as
			 added by section 201(a)) is amended by inserting after subsection (a) the
			 following new subsection:

					(b)Net tangible
				benefit for refinancing of residential mortgage loans
						(1)In
				generalIn accordance with
				regulations prescribed under paragraph (3), no creditor may extend credit in
				connection with any residential mortgage loan that involves a refinancing of a
				prior existing residential mortgage loan unless the creditor reasonably and in
				good faith determines, at the time the loan is consummated and on the basis of
				information known by or obtained in good faith by the creditor, that the
				refinanced loan will provide a net tangible benefit to the consumer.
						(2)Certain loans
				providing no net tangible benefitA residential mortgage loan that involves a
				refinancing of a prior existing residential mortgage loan shall not be
				considered to provide a net tangible benefit to the consumer if the costs of
				the refinanced loan, including points, fees and other charges, exceed the
				amount of any newly advanced principal without any corresponding changes in the
				terms of the refinanced loan that are advantageous to the consumer.
						(3)Net tangible
				benefitThe Federal banking
				agencies shall jointly prescribe regulations defining the term net
				tangible benefit for purposes of this
				subsection.
						.
			203.Safe harbor and
			 rebuttable presumptionSection
			 129C of the Truth in Lending Act is amended by inserting after subsection (b)
			 (as added by section 202) the following new subsection:

					(c)Presumption of
				ability To repay and net tangible benefit
						(1)In
				generalAny creditor with
				respect to any residential mortgage loan, and any assignee or securitizer of
				such loan, may presume that the loan has met the requirements of subsections
				(a) and (b), if the loan is a qualified mortgage.
						(2)DefinitionsFor
				purposes of this subsection, the following definitions shall apply:
							(A)Qualified
				mortgageThe term
				qualified mortgage means any residential mortgage loan—
								(i)that does not allow a consumer to defer
				repayment of principal or interest, or is not otherwise deemed a
				non-traditional mortgage under guidance, advisories, or
				regulations prescribed by the Federal Banking Agencies;
								(ii)that does not
				provide for a repayment schedule that results in negative amortization at any
				time;
								(iii)for which the
				terms are fully amortizing and which does not result in a balloon payment,
				where a balloon payment is a scheduled payment that is more than
				twice as large as the average of earlier scheduled payments;
								(iv)which has an
				annual percentage rate that does not exceed the average prime offer rate for a
				comparable transaction, as of the date the interest rate is set—
									(I)by 1.5 or more percentage points, in the
				case of a first lien residential mortgage loan having a original principal
				obligation amount that is equal to or less than 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 of 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));
									(II)by 2.5 or more percentage points, in the
				case of a first lien residential mortgage loan having a original principal
				obligation amount that is more than 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 of 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
									(III)by 3.5 or more percentage points, in the
				case of a subordinate lien residential mortgage loan;
									(v)for which the
				income and financial resources relied upon to qualify the obligors on the loan
				are verified and documented;
								(vi)in the case of a
				fixed rate loan, for which the underwriting process is based on a payment
				schedule that fully amortizes the loan over the loan term and takes into
				account all applicable taxes, insurance, and assessments;
								(vii)in the case of
				an adjustable rate loan, for which the underwriting is based on the maximum
				rate permitted under the loan during the first seven years, and a payment
				schedule that fully amortizes the loan over the loan term and takes into
				account all applicable taxes, insurance, and assessments;
								(viii)that does not
				cause the consumer's total monthly debts, including amounts under the loan, to
				exceed a percentage established by regulation of the consumer's monthly gross
				income or such other maximum percentage of such income as may be prescribed by
				regulation under paragraph (4), and such rules shall also take into
				consideration the consumer’s income available to pay regular expenses after
				payment of all installment and revolving debt;
								(ix)for which the
				total points and fees payable in connection with the loan do not exceed 2
				percent of the total loan amount, where points and fees means
				points and fees as defined by Section 103(aa)(4) of the Truth in Lending Act
				(15 U.S.C. 1602(aa)(4)); and
								(x)for which the term
				of the loan does not exceed 30 years, except as such term may be extended under
				paragraph (4).
								(B)Average prime
				offer rateThe term
				average prime offer rate means an annual percentage rate that is
				derived from average interest rates, points, and other loan pricing terms
				currently offered to consumers by a representative sample of creditors for
				mortgage transactions that have low risk pricing characteristics.
							(3)Publication of
				average prime offer rate and APR thresholdsThe Board—
							(A)shall publish, and update at least weekly,
				average prime offer rates;
							(B)may publish multiple rates based on varying
				types of mortgage transactions; and
							(C)shall adjust the thresholds of 1.50
				percentage points in paragraph (2)(A)(iv)(I), 2.50 percentage points in
				paragraph (2)(A)(iv)(II), and 3.50 percentage points in paragraph
				(2)(A)(v)(III), as necessary to reflect significant changes in market
				conditions and to effectuate the purposes of the Mortgage Reform and
				Anti-Predatory Lending Act.
							(4)Regulations
							(A)In
				generalThe Federal banking
				agencies shall jointly prescribe regulations to carry out the purposes of this
				subsection.
							(B)Revision of safe
				harbor criteria
								(i)In
				generalThe Federal banking
				agencies may jointly prescribe regulations that revise, add to, or subtract
				from the criteria that define a qualified mortgage upon a finding that such
				regulations are necessary or proper to ensure that responsible, affordable
				mortgage credit remains available to consumers in a manner consistent with the
				purposes of this section, necessary and appropriate to effectuate the purposes
				of this section and section 129B, to prevent circumvention or evasion thereof,
				or to facilitate compliance with such sections.
								(ii)Loan
				definitionThe following
				agencies shall, in consultation with the Federal banking agencies, prescribe
				rules defining the types of loans they insure, guarantee or administer, as the
				case may be, that are Qualified Mortgages for purposes of subsection (c)(1)(A)
				upon a finding that such rules are consistent with the purposes of this section
				and section 129B, to prevent circumvention or evasion thereof, or to facilitate
				compliance with such sections—
									(I)The Department of
				Housing and Urban Development, with regard to mortgages insured under title II
				of the National Housing Act (12 U.S.C. 1707 et seq.);
									(II)The Secretary of
				Veterans Affairs, with regard to a loan made or guaranteed by the Secretary of
				Veterans Affairs;
									(III)The Secretary of
				Agriculture, with regard loans guaranteed by the Secretary of Agriculture
				pursuant to 42 U.S.C. 1472(h);
									(IV)The Federal
				Housing Finance Agency, with regard to loans meeting the conforming loan
				standards of the Federal National Mortgage Corporation or the Federal Home Loan
				Mortgage Corporation; and
									(V)The Rural Housing
				Service, with regard to loans insured by the Rural Housing
				Service.
									.
			204.LiabilitySection 129C of the Truth in Lending Act is
			 amended by inserting after subsection (c) (as added by section 203) the
			 following new subsection:

					(d)Liability for
				violations
						(1)In
				general
							(A)RescissionIn addition to any other liability under
				this title for a violation by a creditor of subsection (a) or (b) (for example
				under section 130) and subject to the statute of limitations in paragraph (9),
				a civil action may be maintained against a creditor for a violation of
				subsection (a) or (b) with respect to a residential mortgage loan for the
				rescission of the loan, and such additional costs as the obligor may have
				incurred as a result of the violation and in connection with obtaining a
				rescission of the loan, including a reasonable attorney’s fee.
							(B)CureA creditor shall not be liable for
				rescission under subparagraph (A) with respect to a residential mortgage loan
				if, no later than 90 days after the receipt of notification from the consumer
				that the loan violates subsection (a) or (b), the creditor, acting in good
				faith, a cure.
							(2)Limited assignee
				and securitizer liabilityNotwithstanding sections 125(e) and 131 and
				except as provided in paragraph (3), a civil action which may be maintained
				against a creditor with respect to a residential mortgage loan for a violation
				of subsection (a) or (b) may be maintained against any assignee or securitizer
				of such residential mortgage loan, who has acted in good faith, for the
				following liabilities only:
							(A)Rescission of the loan.
							(B)Such additional costs as the obligor may
				have incurred as a result of the violation and in connection with obtaining a
				rescission of the loan, including a reasonable attorney’s fee.
							(3)Assignee and
				securitizer exemptionNo
				assignee or securitizer of a residential mortgage loan that has exercised
				reasonable due diligence in complying with the requirements of subsections (a)
				and (b), consistent with reasonable due diligence practices prescribed by the
				Federal banking agencies, shall be liable under paragraph (2) with respect to
				such loan if, no later than 90 days after the receipt of notification from the
				consumer that the loan violates subsection (a) or (b), the assignee or
				securitizer provides a cure so that the loan satisfies the requirements of
				subsections (a) and (b).
						(4)Absent
				parties
							(A)Absent
				creditorNotwithstanding the
				exemption provided in paragraph (3), if the creditor with respect to a
				residential mortgage loan made in violation of subsection (a) or (b) has ceased
				to exist as a matter of law or has filed for bankruptcy protection under title
				11, United States Code, or has had a receiver, conservator, or liquidating
				agent appointed, a consumer may maintain a civil action against an assignee to
				cure the residential mortgage loan, plus the costs and reasonable attorney’s
				fees incurred in obtaining such remedy.
							(B)Absent creditor
				and assigneeNotwithstanding the exemption provided in paragraph
				(3), if the creditor with respect to a residential mortgage loan made in
				violation of subsection (a) or (b) and each assignee of such loan have ceased
				to exist as a matter of law or have filed for bankruptcy protection under title
				11, United States Code, or have had receivers, conservators, or liquidating
				agents appointed, the consumer may maintain the civil action referred to in
				subparagraph (A) against the securitizer.
							(5)Cure
				definedFor purposes of this
				subsection, the term cure means, with respect to a residential
				mortgage loan that violates subsection (a) or (b), the modification or
				refinancing, at no cost to the consumer, of the loan to provide terms that
				satisfy the requirements of subsections (a) and (b) and the payment of such
				additional costs as the obligor may have incurred in connection with obtaining
				a cure of the loan, including a reasonable attorney’s fee.
						(6)Disagreement
				over cureIf any creditor,
				assignee, or securitizer and a consumer fail to reach agreement on a cure with
				respect to a residential mortgage loan that violates subsection (a) or (b), or
				the consumer fails to accept a cure proffered by a creditor, assignee, or
				securitizer—
							(A)the creditor,
				assignee, or securitizer may provide the cure; and
							(B)the consumer may
				challenge the adequacy of the cure during the 6-month period beginning when the
				cure is provided.
							If the
				consumer’s challenge, under this paragraph, of a cure is successful, the
				creditor, assignee, or securitizer shall be liable to the consumer for
				rescission of the loan and such additional costs under paragraph (2).(7)Inability to
				provide or obtain rescissionIf a creditor, assignee, or securitizer
				cannot provide, or a consumer cannot obtain, rescission under paragraph (1) or
				(2), the liability of such creditor, assignee, or securitizer shall be met by
				providing the financial equivalent of a rescission, together with such
				additional costs as the obligor may have incurred as a result of the violation
				and in connection with obtaining a rescission of the loan, including a
				reasonable attorney’s fee.
						(8)No class actions
				against assignee or securitizer under paragraph
				(2)Only individual actions may
				be brought against an assignee or securitizer of a residential mortgage loan
				for a violation of subsection (a) or (b).
						(9)Statute of
				limitationsThe liability of
				a creditor, assignee, or securitizer under this subsection shall apply in any
				original action against a creditor under paragraph (1) or an assignee or
				securitizer under paragraph (2) which is brought before—
							(A)in the case of any
				residential mortgage loan other than a loan to which subparagraph (B) applies,
				the end of the 3-year period beginning on the date the loan is consummated;
				or
							(B)in the case of a residential mortgage loan
				that provides for a fixed interest rate for an introductory period and then
				resets or adjusts to a variable rate or that provides for a nonamortizing
				payment schedule and then converts to an amortizing payment schedule, the
				earlier of—
								(i)the end of the
				1-year period beginning on the date of such reset, adjustment, or conversion;
				or
								(ii)the end of the 6-year period beginning on
				the date the loan is consummated.
								(10)Trustees,
				pools, and investors in pools excludedIn the case of residential mortgage loans
				acquired or aggregated for the purpose of including such loans in a pool of
				assets held for the purpose of issuing or selling instruments representing
				interests in such pools including through a securitization vehicle, the terms
				assignee and securitizer, as used in this section, do
				not include the securitization vehicle, any trustee that holds such loans
				solely for the benefit of the securitization vehicle, the pools of such loans
				or any original or subsequent purchaser of any interest in the securitization
				vehicle or any instrument representing a direct or indirect interest in such
				pool.
						(e)Obligation of
				securitizers, and preservation of borrower remedies
						(1)Obligation to
				retain accessAny securitizer of a residential mortgage loan sold
				or to be sold as part of a securitization vehicle shall, in any document or
				contract providing for the transfer, conveyance, or the establishment of such
				securitization vehicle, reserve the right and preserve the ability—
							(A)to identify and
				obtain access to any such loan;
							(B)to acquire any
				such loan in the event of a violation of subsection (a) or (b) of this section;
				and
							(C)to provide to the
				consumer any and all remedies provided for under this title for any violation
				of this title.
							(2)Additional
				damagesAny creditor, assignee, or securitizer of a residential
				mortgage loan that is subject to a remedy under subsection (d) and has failed
				to comply with paragraph (1) shall be subject to additional exemplary or
				punitive damages not to exceed the original principal balance of such
				loan.
						(3)Contact
				information noticeThe servicer with respect to a residential
				mortgage loan shall provide a written notice to a consumer identifying the name
				and contact information of the creditor or any assignee or securitizer who
				should be contacted by the consumer for any reason concerning the consumer’s
				rights with respect to the loan. Such notice shall be provided—
							(A)upon request of
				the consumer;
							(B)whenever there is
				a change in ownership of a residential mortgage loan; or
							(C)on a regular
				basis, not less than annually.
							(f)Rules To
				establish processThe Board shall promulgate rules to govern the
				rescission process established for violations of subsections (a) and (b) of
				this section. Such rules shall provide that notice given to a servicer or
				holder is sufficient notice regardless of the identity of the party or the
				parties liable under this
				title.
					.
			205.Defense to
			 foreclosureSection 129C of
			 the Truth in Lending Act is amended by inserting after subsection (f) (as added
			 by section 204) the following new subsections:

					(g)Defense to
				foreclosureNotwithstanding
				any other provision of law—
						(1)when the holder of
				a residential mortgage loan or anyone acting for such holder initiates a
				judicial or nonjudicial foreclosure—
							(A)a consumer who has the right to rescind
				under this section with respect to such loan against the creditor or any
				assignee or securitizer may assert such right as a defense to foreclosure or
				counterclaim to such foreclosure against the holder, or
							(B)if the foreclosure proceeding begins after
				the end of the period during which a consumer may bring an action for
				rescission under subsection (d) and the consumer would have had a valid basis
				for such an action if it had been brought before the end of such period, the
				consumer may seek actual damages incurred by reason of the violation which gave
				rise to the right of rescission, together with costs of the action, including a
				reasonable attorney’s fee against the creditor or any assignee or securitizer;
				and
							(2)such holder or anyone acting for such
				holder or any other applicable third party may sell, transfer, convey, or
				assign a residential mortgage loan to a creditor, any assignee, or any
				securitizer, or their designees, subject to the rights of the consumer
				described in this subsection, to effect a rescission or
				cure.
						.
			206.Additional
			 standards and requirements
				(a)In
			 generalSection 129C of the
			 Truth in Lending Act is amended by inserting after subsection (g) (as added by
			 section 205) the following new subsections:

						(h)Prohibition on
				certain prepayment penalties
							(1)Prohibited on
				certain loansA residential
				mortgage loan that is not a qualified mortgage may not contain
				terms under which a consumer must pay a prepayment penalty for paying all or
				part of the principal after the loan is consummated. For purposes of this
				subsection, a qualified mortgage may not include a residential
				mortgage loan that has an adjustable rate.
							(2)Phased-out
				penalties on qualified mortgagesA qualified mortgage (as defined
				in subsection (c)) may not contain terms under which a consumer must pay a
				prepayment penalty for paying all or part of the principal after the loan is
				consummated in excess of the following limitations:
								(A)During the 1-year
				period beginning on the date the loan is consummated, the prepayment penalty
				shall not exceed an amount equal to 3 percent of the outstanding balance on the
				loan.
								(B)During the 1-year period beginning after
				the period described in subparagraph (A), the prepayment penalty shall not
				exceed an amount equal to 2 percent of the outstanding balance on the
				loan.
								(C)During the 1-year period beginning after
				the 1-year period described in subparagraph (B), the prepayment penalty shall
				not exceed an amount equal to 1 percent of the outstanding balance on the
				loan.
								(D)After the end of the 3-year period
				beginning on the date the loan is consummated, no prepayment penalty may be
				imposed on a qualified mortgage.
								(3)Option for no
				prepayment penalty requiredA creditor may not offer a consumer a
				residential mortgage loan product that has a prepayment penalty for paying all
				or part of the principal after the loan is consummated as a term of the loan
				without offering the consumer a residential mortgage loan product that does not
				have a prepayment penalty as a term of the loan.
							(i)Single premium
				credit insurance prohibitedNo creditor may finance, directly or
				indirectly, in connection with any residential mortgage loan or with any
				extension of credit under an open end consumer credit plan secured by the
				principal dwelling of the consumer (other than a reverse mortgage), any credit
				life, credit disability, credit unemployment or credit property insurance, or
				any other accident, loss-of-income, life or health insurance, or any payments
				directly or indirectly for any debt cancellation or suspension agreement or
				contract, except that—
							(1)insurance premiums
				or debt cancellation or suspension fees calculated and paid in full on a
				monthly basis shall not be considered financed by the creditor; and
							(2)this subsection shall not apply to credit
				unemployment insurance for which the unemployment insurance premiums are
				reasonable, the creditor receives no direct or indirect compensation in
				connection with the unemployment insurance premiums, and the unemployment
				insurance premiums are paid pursuant to another insurance contract and not paid
				to an affiliate of the creditor.
							(j)Arbitration
							(1)In
				generalNo residential
				mortgage loan and no extension of credit under an open end consumer credit plan
				secured by the principal dwelling of the consumer, other than a reverse
				mortgage, may include terms which require arbitration or any other nonjudicial
				procedure as the method for resolving any controversy or settling any claims
				arising out of the transaction.
							(2)Post-controversy
				agreementsSubject to paragraph (3), paragraph (1) shall not be
				construed as limiting the right of the consumer and the creditor, any assignee,
				or any securitizer to agree to arbitration or any other nonjudicial procedure
				as the method for resolving any controversy at any time after a dispute or
				claim under the transaction arises.
							(3)No waiver of
				statutory cause of actionNo
				provision of any residential mortgage loan or of any extension of credit under
				an open end consumer credit plan secured by the principal dwelling of the
				consumer (other than a reverse mortgage), and no other agreement between the
				consumer and the creditor relating to the residential mortgage loan or
				extension of credit referred to in paragraph (1), shall be applied or
				interpreted so as to bar a consumer from bringing an action in an appropriate
				district court of the United States, or any other court of competent
				jurisdiction, pursuant to section 130 or any other provision of law, for
				damages or other relief in connection with any alleged violation of this
				section, any other provision of this title, or any other Federal law.
							(k)Mortgages with
				negative amortizationNo creditor may extend credit to a borrower
				in connection with a consumer credit transaction under an open or closed end
				consumer credit plan secured by a dwelling or residential real property that
				includes a dwelling, other than a reverse mortgage, that provides or permits a
				payment plan that may, at any time over the term of the extension of credit,
				result in negative amortization unless, before such transaction is
				consummated—
							(1)the creditor
				provides the consumer with a statement that—
								(A)the pending
				transaction will or may, as the case may be, result in negative
				amortization;
								(B)describes negative
				amortization in such manner as the Federal banking agencies shall
				prescribe;
								(C)negative amortization increases the
				outstanding principal balance of the account; and
								(D)negative amortization reduces the
				consumer’s equity in the dwelling or real property; and
								(2)in the case of a first-time borrower with
				respect to a residential mortgage loan that is not a qualified mortgage, the
				first-time borrower provides the creditor with sufficient documentation to
				demonstrate that the consumer received homeownership counseling from
				organizations or counselors certified by the Secretary of Housing and Urban
				Development as competent to provide such
				counseling.
							.
				(b)Conforming
			 amendment relating to enforcementSection 108(a) of the Truth in
			 Lending Act (15 U.S.C. 1607(a)) is amended by inserting after paragraph (6) the
			 following new paragraph:

						(7)sections 21B and 21C of the Securities
				Exchange Act of 1934, in the case of a broker or dealer, other than a
				depository institution, by the Securities and Exchange
				Commission.
						.
				(c)Protection
			 against loss of anti-deficiency protectionSection 129C of the
			 Truth in Lending Act is amended by inserting after subsection (k) (as added by
			 subsection (a) of this section) the following new subsection (and designated
			 succeeding subsections accordingly):

						(l)Protection
				against loss of anti-deficiency protection
							(1)DefinitionFor purposes of this subsection, the term
				anti-deficiency law means the law of any State which provides
				that, in the event of foreclosure on the residential property of a consumer
				securing a mortgage, the consumer is not liable, in accordance with the terms
				and limitations of such State law, for any deficiency between the sale price
				obtained on such property through foreclosure and the outstanding balance of
				the mortgage.
							(2)Notice at time
				of consummationIn the case
				of any residential mortgage loan that is, or upon consummation will be, subject
				to protection under an anti-deficiency law, the creditor or mortgage originator
				shall provide a written notice to the consumer describing the protection
				provided by the anti-deficiency law and the significance for the consumer of
				the loss of such protection before such loan is consummated.
							(3)Notice before
				refinancing that would cause loss of protectionIn the case of
				any residential mortgage loan that is subject to protection under an
				anti-deficiency law, if a creditor or mortgage originator provides an
				application to a consumer, or receives an application from a consumer, for any
				type of refinancing for such loan that would cause the loan to lose the
				protection of such anti-deficiency law, the creditor or mortgage originator
				shall provide a written notice to the consumer describing the protection
				provided by the anti-deficiency law and the significance for the consumer of
				the loss of such protection before any agreement for any such refinancing is
				consummated.
							.
				(d)Policy regarding
			 acceptance of partial paymentSection 129C of the Truth in Lending Act is
			 amended by inserting after subsection (l) the following new subsection (and
			 redesignating subsequent subsections of such section accordingly):

						(m)Policy regarding
				acceptance of partial paymentIn the case of any residential mortgage
				loan, a creditor shall disclose prior to settlement or, in the case of a person
				becoming a creditor with respect to an existing residential mortgage loan, at
				the time such person becomes a creditor—
							(1)the creditor’s
				policy regarding the acceptance of partial payments; and
							(2)if partial
				payments are accepted, how such payments will be applied to such mortgage and
				if such payments will be placed in
				escrow.
							.
				207.Rule of
			 constructionExcept as
			 otherwise expressly provided in section 129B or 129C of the Truth in Lending
			 Act (as added by this Act), no provision of such section 129B or 129C shall be
			 construed as superseding, repealing, or affecting any duty, right, obligation,
			 privilege, or remedy of any person under any other provision of the Truth in
			 Lending Act or any other provision of Federal or State law.
			208.Effect on State
			 laws
				(a)In
			 generalExcept as provided in
			 subsection (b), section 129C(d) of the Truth in Lending Act (as added by
			 section 204) shall supersede any State law to the extent that it provides
			 additional remedies against any assignee, securitizer, or securitization
			 vehicle for a violation of subsection (a) or (b) of section 129C of such Act or
			 any other State law the terms of which address the specific subject matter of
			 subsection (a) (determination of ability to repay) or (b) (requirement of a net
			 tangible benefit) of section 129C of such Act, and the remedies described in
			 section 129C(d) shall constitute the sole remedies against any assignee,
			 securitizer, or securitization vehicle for such violations.
				(b)Rules of
			 constructionNo provision of this section shall be construed as
			 limiting—
					(1)the application of
			 any State law, or the availability of remedies under such law, against a
			 creditor for a particular residential mortgage loan regardless of whether such
			 creditor also acts as an assignee, securitizer, or securitization vehicle for
			 such loan;
					(2)the application of
			 any State law, or the availability of remedies under such law, against an
			 assignee, securitizer, or securitization vehicle under State law, other than a
			 provision of such law the terms of which address the specific subject matter of
			 subsection (a) (determination of ability to repay) or (b) (requirement of a net
			 tangible benefit) of section 129C of such Act;
					(3)(A)the application of any State law, or the
			 availability of remedies under such law, against an assignee, securitizer or
			 securitization vehicle for its participation in or direction of the credit or
			 underwriting decisions of a creditor relating to the making of a residential
			 mortgage loan; or
						(B)the ability of a consumer to assert any
			 rights against or obtain any remedies from an assignee, securitizer or
			 securitization vehicle with respect to a residential mortgage loan as a defense
			 to foreclosure under section 129C(g);
						(4)the availability of any equitable remedies,
			 including injunctive relief, under State law; or
					(5)notwithstanding paragraph (2), the
			 availability of any remedies under State law against any assignee, securitizer
			 or securitization vehicle that—
						(A)are in addition to
			 those remedies provided for in section 129C; and
						(B)were in effect on
			 the date of enactment of this Act.
						209.RegulationsRegulations required or authorized to be
			 prescribed under this title or the amendments made by this title—
				(1)shall be
			 prescribed in final form before the end of the 12-month period beginning on the
			 date of the enactment of this Act; and
				(2)shall take effect not later than 18 months
			 after the date of the enactment of this Act.
				210.Amendments to
			 civil liability provisions
				(a)Increase in
			 amount of civil money penalties for certain violationsSection
			 130(a)(2) of the Truth in Lending Act (15 U.S.C. 1640(a)(2)) is amended—
					(1)by striking
			 $100 and inserting $200;
					(2)by striking
			 $1,000 and inserting $2,000; and
					(3)by striking
			 $500,000 and inserting $1,000,000.
					(b)Statute of
			 limitations extended for section 129 violationsSection 130(e) of
			 the Truth in Lending Act (15 U.S.C. 1640(e)) is amended—
					(1)in the first
			 sentence, by striking Any action and inserting Except as
			 provided in the subsequent sentence, any action; and
					(2)by inserting after
			 the first sentence the following new sentence: Any action under this
			 section with respect to any violation of section 129 may be brought in any
			 United States district court, or in any other court of competent jurisdiction,
			 before the end of the 3-year period beginning on the date of the occurrence of
			 the violation..
					211.Lender rights
			 in the context of borrower deceptionSection 130 of the Truth in Lending Act is
			 amended by adding at the end the following new subsection:

					(k)Exemption from
				liability and rescission in case of borrower fraud or deceptionIn addition to any other remedy available
				by law or contract, no creditor, assignee, or securitizer shall be liable to an
				obligor under this section, nor shall it be subject to the right of rescission
				of any obligor under 129B, if such obligor, or co-obligor, knowingly, or
				willfully and with actual knowledge furnished material information known to be
				false for the purpose of obtaining such residential mortgage
				loan.
					.
			212.Six-month
			 notice required before reset of hybrid adjustable rate mortgages
				(a)In
			 generalChapter 2 of the
			 Truth in Lending Act (15 U.S.C. 1631 et seq.) is amended by inserting after
			 section 128 the following new section:

						128A.Reset of
				hybrid adjustable rate mortgages
							(a)Hybrid
				adjustable rate mortgages definedFor purposes of this section, the term
				hybrid adjustable rate mortgage means a consumer credit
				transaction secured by the consumer's principal residence with a fixed interest
				rate for an introductory period that adjusts or resets to a variable interest
				rate after such period.
							(b)Notice of Reset
				and alternativesDuring the
				1-month period that ends 6 months before the date on which the interest rate in
				effect during the introductory period of a hybrid adjustable rate mortgage
				adjusts or resets to a variable interest rate or, in the case of such an
				adjustment or resetting that occurs within the first 6 months after
				consummation of such loan, at consummation, the creditor or servicer of such
				loan shall provide a written notice, separate and distinct from all other
				correspondence to the consumer, that includes the following:
								(1)Any index or formula used in making
				adjustments to or resetting the interest rate and a source of information about
				the index or formula.
								(2)An explanation of how the new interest rate
				and payment would be determined, including an explanation of how the index was
				adjusted, such as by the addition of a margin.
								(3)A good faith estimate, based on accepted
				industry standards, of the creditor or servicer of the amount of the monthly
				payment that will apply after the date of the adjustment or reset, and the
				assumptions on which this estimate is based.
								(4)A list of alternatives consumers may pursue
				before the date of adjustment or reset, and descriptions of the actions
				consumers must take to pursue these alternatives, including—
									(A)refinancing;
									(B)renegotiation of
				loan terms;
									(C)payment
				forbearances; and
									(D)pre-foreclosure
				sales.
									(5)The names, addresses, telephone numbers,
				and Internet addresses of counseling agencies or programs reasonably available
				to the consumer that have been certified or approved and made publicly
				available by the Secretary of Housing and Urban Development or a State housing
				finance authority (as defined in section 1301 of the Financial Institutions
				Reform, Recovery, and Enforcement Act of 1989).
								(6)The address, telephone number, and Internet
				address for the State housing finance authority (as so defined) for the State
				in which the consumer
				resides.
								.
				(b)Clerical
			 amendmentThe table of sections for chapter 2 of the Truth in
			 Lending Act is amended by inserting after the item relating to section 128 the
			 following new item:

							128A. Reset of hybrid adjustable rate
				mortgages.

						.
				213.Credit risk
			 retentionSection 129C of the
			 Truth in Lending Act is amended by inserting after subsection (k) (as added by
			 section 206) the following new subsection:

					(l)Credit risk
				retention
						(1)In
				generalThe Federal banking
				agencies shall prescribe regulations jointly to require any creditor that makes
				a residential mortgage loan that is not a qualified mortgage (as defined under
				section 129C(c)(2)(A)), to retain an economic interest in a material portion of
				the credit risk for any such loan that the creditor transfers, sells or conveys
				to a third party.
						(2)Standards for
				regulationsRegulations prescribed under paragraph (1)
				shall—
							(A)apply only to residential mortgage loans
				that are not qualified mortgages (as so defined);
							(B)prohibit a creditor from directly or
				indirectly hedging or otherwise transferring the credit risk such creditor is
				required to retain under the regulations with respect to any residential
				mortgage loan;
							(C)require a creditor to retain at least 5
				percent of the credit risk on any non-qualified mortgage that is transferred,
				sold or conveyed by such creditor; and
							(D)specify the
				permissible forms of the required risk retention (for example, first loss
				position or pro rata vertical slice) and the minimum duration of the required
				risk retention.
							(3)Exceptions and
				adjustments
							(A)In
				generalThe Federal banking
				agencies shall have authority to jointly provide exceptions or adjustments to
				the requirements of this subsection, including exceptions or adjustments
				relating to the 5 percent risk retention threshold and the hedging
				prohibition.
							(B)Applicable
				standardsAny exceptions or adjustments granted by the Federal
				banking agencies shall—
								(i)be consistent with the purpose of this
				subsection to help ensure high quality underwriting standards for creditors
				that make residential mortgage loans that are not qualified mortgages;
				and
								(ii)facilitate appropriate risk management
				practices by such creditors, improve access of consumers to mortgage credit on
				reasonable terms, or otherwise serve the public interest.
								(4)Alternative risk
				retention for securitizersThe Federal banking agencies may jointly,
				in their discretion, apply the risk retention requirements of this subsection
				to securitizers of residential mortgages (or particular types of residential
				mortgages) that are not qualified mortgages in addition to or in substitution
				for any or all of the requirements that apply to creditors that make such
				mortgages if the agencies jointly determine that applying the requirements to
				such securitizers would—
							(A)be consistent with the purpose of this
				subsection to help ensure high quality underwriting standards for creditors of
				residential mortgage loans that are not qualified mortgages; and
							(B)facilitate appropriate risk management
				practices by such creditors, improve access of consumers to mortgage credit on
				reasonable terms, or otherwise serve the public interest.
							(m)Section 129C and
				any regulations promulgated thereunder do not apply to an extension of credit
				relating to a plan described in section 101(53D) of title 11, United States
				Code.
					.
			214.Required
			 disclosuresSection 128(a) of
			 Truth in Lending Act (15 U.S.C. 1638(a)) is amended by adding at the end the
			 following new paragraphs:

					(16)In the case of a variable rate residential
				mortgage loan for which an escrow or impound account will be established for
				the payment of all applicable taxes, insurance, and assessments—
						(A)the amount of
				initial monthly payment due under the loan for the payment of principal and
				interest, and the amount of such initial monthly payment including the monthly
				payment deposited in the account for the payment of all applicable taxes,
				insurance, and assessments; and
						(B)the amount of the
				fully indexed monthly payment due under the loan for the payment of principal
				and interest, and the amount of such fully indexed monthly payment including
				the monthly payment deposited in the account for the payment of all applicable
				taxes, insurance, and assessments.
						(17)In the case of a
				residential mortgage loan, the aggregate amount of settlement charges for all
				settlement services provided in connection with the loan, the amount of charges
				that are included in the loan and the amount of such charges the borrower must
				pay at closing, the approximate amount of the wholesale rate of funds in
				connection with the loan, and the aggregate amount of other fees or required
				payments in connection with the loan.
					(18)In the case of a
				residential mortgage loan, the aggregate amount of fees paid to the mortgage
				originator in connection with the loan, the amount of such fees paid directly
				by the consumer, and any additional amount received by the originator from the
				creditor.
					(19)In the case of a
				residential mortgage loan, the total amount of interest that the consumer will
				pay over the life of the loan as a percentage of the principal of the loan.
				Such amount shall be computed assuming the consumer makes each monthly payment
				in full and on-time, and does not make any
				over-payments.
					.
			215.Disclosures
			 required in monthly statements for residential mortgage loansSection 128 of the Truth in Lending Act (15
			 U.S.C. 1638) is amended by adding at the end the following new
			 subsection:

					(f)Periodic
				statements for residential mortgage loans
						(1)In
				generalThe creditor, assignee, or servicer with respect to any
				residential mortgage loan shall transmit to the obligor, for each billing
				cycle, a statement setting forth each of the following items, to the extent
				applicable, in a conspicuous and prominent manner:
							(A)The amount of the principal obligation
				under the mortgage.
							(B)The current
				interest rate in effect for the loan.
							(C)The date on which
				the interest rate may next reset or adjust.
							(D)The amount of any
				prepayment fee to be charged, if any.
							(E)A description of
				any late payment fees.
							(F)A telephone number
				and electronic mail address that may be used by the obligor to obtain
				information regarding the mortgage.
							(G)The names, addresses, telephone numbers,
				and Internet addresses of counseling agencies or programs reasonably available
				to the consumer that have been certified or approved and made publicly
				available by the Secretary of Housing and Urban Development or a State housing
				finance authority (as defined in section 1301 of the Financial Institutions
				Reform, Recovery, and Enforcement Act of 1989).
							(H)Such other
				information as the Board may prescribe in regulations.
							(2)Development and
				use of standard formThe
				Federal banking agencies shall jointly develop and prescribe a standard form
				for the disclosure required under this subsection, taking into account that the
				statements required may be transmitted in writing or
				electronically.
						.
			216.Legal
			 assistance for foreclosure-related issues
				(a)EstablishmentThe Secretary of Housing and Urban
			 Development (hereafter in this section referred to as the
			 Secretary shall establish a program for making grants for
			 providing a full range of foreclosure legal assistance to low- and
			 moderate-income homeowners and tenants related to home ownership preservation,
			 home foreclosure prevention, and tenancy associated with home
			 foreclosure.
				(b)Competitive
			 allocationThe Secretary
			 shall allocate amounts made available for grants under this section to State
			 and local legal organizations on the basis of a competitive process. For
			 purposes of this subsection State and local legal organizations
			 are those State and local organizations whose primary business or mission is to
			 provide legal assistance.
				(c)Priority to
			 certain areasIn allocating amounts in accordance with subsection
			 (b), the Secretary shall give priority consideration to State and local legal
			 organizations that are operating in the 100 metropolitan statistical areas (as
			 that term is defined by the Director of the Office of Management and Budget)
			 with the highest home foreclosure rates.
				(d)Legal
			 assistance
					(1)In
			 generalAny State or local legal organization that receives
			 financial assistance pursuant to this section may use such amounts only to
			 assist—
						(A)homeowners of
			 owner-occupied homes with mortgages in default, in danger of default, or
			 subject to or at risk of foreclosure; and
						(B)tenants at risk of
			 or subject to eviction as a result of foreclosure of the property in which such
			 tenant resides.
						(2)Commence use
			 within 90 daysAny State or
			 local legal organization that receives financial assistance pursuant to this
			 section shall begin using any financial assistance received under this section
			 within 90 days after receipt of the assistance.
					(3)Prohibition on
			 class actionsNo funds provided to a State or local legal
			 organization under this section may be used to support any class action
			 litigation.
					(4)Limitation on
			 legal assistanceLegal assistance funded with amounts provided
			 under this section shall be limited to mortgage-related default, eviction, or
			 foreclosure proceedings, without regard to whether such foreclosure is judicial
			 or nonjudicial.
					(5)Effective
			 dateNotwithstanding section
			 217, this subsection shall take effect on the date of the enactment of this
			 Act.
					(e)Limitation on
			 distribution of assistance
					(1)In
			 generalNone of the amounts
			 made available under this section shall be distributed to—
						(A)any organization
			 which has been convicted for a violation under Federal law relating to an
			 election for Federal office; or
						(B)any organization
			 which employs applicable individuals.
						(2)Definition of
			 applicable individualsIn this subsection, the term
			 applicable individual means an individual who—
						(A)is—
							(i)employed by the
			 organization in a permanent or temporary capacity;
							(ii)contracted or
			 retained by the organization; or
							(iii)acting on behalf
			 of, or with the express or apparent authority of, the organization; and
							(B)has been convicted
			 for a violation under Federal law relating to an election for Federal office.
						(f)Authorization of
			 appropriationsThere are
			 authorized to be appropriated to the Secretary $35,000,000 for each of fiscal
			 years 2009 through 2012 for grants under this section.
				217.Effective
			 dateThe amendments made by
			 this title shall apply to transactions consummated on or after the effective
			 date of the regulations specified in section 209.
			218.Report by the
			 GAO
				(a)Report
			 requiredThe Comptroller
			 General shall conduct a study to determine the effects the enactment of this
			 Act will have on the availability and affordability of credit for consumers,
			 small businesses, homebuyers, and mortgage lending, including the
			 effect—
					(1)on the mortgage market for mortgages that
			 are not within the safe harbor provided in the amendments made by this
			 title;
					(2)on the ability of
			 prospective homebuyers to obtain financing;
					(3)on the ability of
			 homeowners facing resets or adjustments to refinance—for example, do they have
			 fewer refinancing options due to the unavailability of certain loan products
			 that were available before the enactment of this Act;
					(4)on minorities’
			 ability to access affordable credit compared with other prospective
			 borrowers;
					(5)on home sales and
			 construction;
					(6)of extending the
			 rescission right, if any, on adjustable rate loans and its impact on
			 litigation;
					(7)of State
			 foreclosure laws and, if any, an investor’s ability to transfer a property
			 after foreclosure;
					(8)of expanding the
			 existing provisions of the Home Ownership and Equity Protection Act of
			 1994;
					(9)of prohibiting
			 prepayment penalties on high-cost mortgages; and
					(10)of establishing counseling services under
			 the Department of Housing and Urban Development and offered through the Office
			 of Housing Counseling.
					(b)ReportBefore
			 the end of the 1-year period beginning on the date of the enactment of this
			 Act, the Comptroller General shall submit a report to the Congress containing
			 the findings and conclusions of the Comptroller General with respect to the
			 study conducted pursuant to subsection (a).
				(c)Examination
			 related to certain credit risk retention provisionsThe report required by subsection (b) shall
			 also include an analysis by the Comptroller General of the effect on the
			 capital reserves and funding of lenders of credit risk retention provisions for
			 non-qualified mortgages, including an analysis of the exceptions and
			 adjustments authorized in section 129C(l)(3)(A) of the Truth in Lending Act and
			 a recommendation on whether a uniform standard is needed.
				(d)Analysis of
			 credit risk retention provisionsThe report required by subsection (b) shall
			 also include—
					(1)an analysis by the
			 Comptroller General of whether the credit risk retention provisions have
			 significantly reduced risks to the larger credit market of the repackaging and
			 selling of securitized loans on a secondary market; and
					(2)recommendations to
			 the Congress on adjustments that should be made, or additional measures that
			 should be undertaken.
					219.State Attorney
			 General enforcement authoritySection 130(e) of the Truth in Lending Act
			 (15 U.S.C. 1640(e)) is amended by striking section 129 may also
			 and inserting section 129, 129B, or 129C of this Act, section 220 of the
			 Mortgage Reform and Anti-Predatory Lending Act, or any amendment made by
			 section 220 of the Mortgage Reform and Anti-Predatory Lending Act may
			 also.
			220.Tenant
			 protection
				(a)Tenant
			 protection generally
					(1)In
			 generalIn the case of any foreclosure on any dwelling or
			 residential real property, after the date of the enactment of the Mortgage
			 Reform and Anti-Predatory Lending Act, the immediate successor in interest in
			 such property pursuant to the foreclosure shall assume such interest subject
			 to—
						(A)except as provided in paragraph (2), the
			 rights of any bona fide tenant, as of the date of foreclosure under any bona
			 fide lease entered into before the date of foreclosure, to occupy the premises
			 until the end of the remaining term of the lease; and
						(B)the rights of any bona fide tenant, as of
			 the date of foreclosure, without a lease or with a lease terminable at will
			 under State law, subject to the provision by the immediate successor in
			 interest and the receipt by the tenant in the unit, of a notice to vacate at
			 least 90 days before the effective date of such notice.
						(2)Exception for
			 subsequent owner-occupantNotwithstanding paragraph (1), if the
			 immediate successor in interest of any dwelling or residential real property
			 that is otherwise subject to paragraph (1) is a purchaser who will occupy a
			 unit of the dwelling or residential real property as a primary residence, or
			 such successor in interest sells the dwelling or residential real property to a
			 purchaser who will occupy a unit of the dwelling or residential real property,
			 as a primary residence—
						(A)such purchaser may
			 terminate a lease relating to such unit on the effective date of a notice to
			 vacate; and
						(B)(i)such notice to vacate shall be provided by
			 the purchaser to the tenant in such unit at least 90 days before the effective
			 date of such notice; and (ii) with respect to a single-family residence for
			 which the borrower rented the unit in violation of the mortgage contract, such
			 notice to vacate shall be provided by the purchaser to the tenant in such unit
			 at least 30 days before the effective date of such notice, and shall include a
			 copy of the mortgage contract prohibiting the rental of the unit.
							(3)Bona fide lease
			 or tenancyFor purposes of
			 this subsection, a lease or tenancy shall be considered bona fide only
			 if—
						(A)the mortgagor under the contract is not the
			 tenant;
						(B)the lease or
			 tenancy was the result of an arms-length transaction; and
						(C)the lease or
			 tenancy requires the receipt of rent that is not substantially less than fair
			 market rent for the property or the unit’s rent is reduced or subsidized due to
			 a Federal, State, or local subsidy.
						(4)Rule of
			 constructionExcept for the
			 specific provisions of this subsection, no provision of this subsection shall
			 be construed as affecting the requirements for termination of any Federal- or
			 State-subsidized tenancy. The provisions of this subsection shall not be
			 construed to limit any State or local law that provides longer time periods or
			 other additional protections for tenants.
					(b)Corresponding
			 provision relating to effect of foreclosures on section 8
			 tenanciesParagraph (7) of section 8(o) of the United States
			 Housing Act of 1937 (42 U.S.C. 1437f(o)(7)) is amended—
					(1)in subparagraph (C), by inserting before
			 the semicolon at the end the following:

							, and
			 in the case of an owner who is an immediate successor in interest pursuant to
			 foreclosure—(i)during the initial term of the tenant’s
				lease, having the property vacant prior to sale shall not constitute good
				cause; and
							(ii)in subsequent
				lease terms of the tenant’s lease, who will occupy the unit as a primary
				residence, who sells the property to a purchaser who will occupy a unit of the
				property as a primary residence, or if the unit is unmarketable while occupied,
				such owner may terminate a lease relating to such unit for good cause on the
				effective date of the notice to vacate, where such notice is provided by the
				owner to the tenant in such unit at least 90 days before the effective date of
				such
				notice;
							.
					(2)in subparagraph
			 (E), by striking and at the end;
					(3)by redesignating
			 subparagraph (F) as subparagraph (G); and
					(4)by inserting after
			 subparagraph (E) the following:

							(F)shall provide that in the case of any
				foreclosure on any residential real property in which a recipient of assistance
				under this subsection resides, the immediate successor in interest in such
				property pursuant to the foreclosure shall assume such interest subject to the
				lease between the prior owner and the tenant and to the housing assistance
				payments contract between the prior owner and the public housing agency for the
				occupied unit; if a public housing agency is unable to make payments under the
				contract to the immediate successor in interest after foreclosure, due to
				action or inaction by the successor in interest, including the rejection of
				payments or the failure of the successor to maintain the unit in compliance
				with paragraph (8) or an inability to identify the successor, the agency may
				use funds that would have been used to pay the rental amount on behalf of the
				family—
								(i)to pay for
				utilities that are the responsibility of the owner under the lease or
				applicable law, after taking reasonable steps to notify the owner that it
				intends to make payments to a utility provider in lieu of payments to the
				owner, except prior notification shall not be required in any case in which the
				unit will be or has been rendered uninhabitable due to the termination or
				threat of termination of service, in which case the public housing agency shall
				notify the owner within a reasonable time after making such payment; or
								(ii)for the family’s
				reasonable moving costs, including security deposit costs;
								except that this subparagraph and
				the provisions related to foreclosure in subparagraph (C) shall not affect any
				State or local law that provides longer time periods or other additional
				protections for
				tenants..
					(c)Landlord notice
			 to tenantsNotwithstanding
			 the law of any State or the terms of any consumer residential lease, each
			 person who owns a dwelling or residential real property—
					(1)which is leased to a bona fide tenant
			 (including a tenancy terminable at will), or which the landlord offers to lease
			 to a prospective tenant; and
					(2)which, pursuant to
			 the terms of a valid loan to such person which is secured by such dwelling or
			 property, is or becomes subject to foreclosure or with respect to which the
			 person is in default,
					shall
			 promptly notify any such tenant or prospective tenant of the circumstances
			 prevailing with respect to such property and the effect of any such default or
			 foreclosure. The requirements of this subsection shall have no effect on any
			 State or local law that provides additional notice or other additional
			 protections for tenants.(d)Effective
			 dateNotwithstanding section 217, this section and the amendments
			 made by this section shall take effect on the date of the enactment of this
			 Act.
				IIIHigh-Cost
			 Mortgages
			301.Definitions
			 relating to high-cost mortgages
				(a)High-cost
			 mortgage definedSection 103(aa) of the Truth in Lending Act (15
			 U.S.C. 1602(aa)) is amended by striking all that precedes paragraph (2) and
			 inserting the following:

						(aa)High-cost
				mortgage
							(1)Definition
								(A)In
				generalThe term high-cost mortgage, and a mortgage
				referred to in this subsection, means a consumer credit transaction that is
				secured by the consumer's principal dwelling, other than a reverse mortgage
				transaction, if—
									(i)in
				the case of a credit transaction secured—
										(I)by a first mortgage on the consumer’s
				principal dwelling, the annual percentage rate at consummation of the
				transaction will exceed by more than 6.5 percentage points (8.5 percentage
				points, if the dwelling is personal property and the transaction is for less
				than $50,000) the average prime offer rate, as defined in section
				129C(c)(2)(B), for a comparable transaction; or
										(II)by a subordinate or junior mortgage on the
				consumer’s principal dwelling, the annual percentage rate at consummation of
				the transaction will exceed by more than 8.5 percentage points the average
				prime offer rate, as defined in section 129C(c)(2)(B), for a comparable
				transaction;
										(ii)the total points
				and fees payable in connection with the transaction exceed—
										(I)in the case of a transaction for $20,000 or
				more, 5 percent of the total transaction amount; or
										(II)in the case of a
				transaction for less than $20,000, the lesser of 8 percent of the total
				transaction amount or $1,000 (or such other dollar amount as the Board shall
				prescribe by regulation); or
										(iii)the credit transaction documents permit the
				creditor to charge or collect prepayment fees or penalties more than 36 months
				after the transaction closing or such fees or penalties exceed, in the
				aggregate, more than 2 percent of the amount prepaid.
									(B)Introductory
				rates taken into accountFor purposes of subparagraph (A)(i), the
				annual percentage rate of interest shall be determined based on the following
				interest rate:
									(i)In
				the case of a fixed-rate transaction in which the annual percentage rate will
				not vary during the term of the loan, the interest rate in effect on the date
				of consummation of the transaction.
									(ii)In the case of a transaction in which the
				rate of interest varies solely in accordance with an index, the interest rate
				determined by adding the index rate in effect on the date of consummation of
				the transaction to the maximum margin permitted at any time during the
				transaction agreement.
									(iii)In the case of any other transaction in
				which the rate may vary at any time during the term of the loan for any reason,
				the interest charged on the transaction at the maximum rate that may be charged
				during the term of the
				transaction.
									.
				(b)Adjustment of
			 percentage pointsSection 103(aa)(2) of the Truth in Lending Act
			 (15 U.S.C. 1602(aa)(2)) is amended by striking subparagraph (B) and inserting
			 the following new subparagraph:

						(B)An increase or
				decrease under subparagraph (A)—
							(i)may not result in
				the number of percentage points referred to in paragraph (1)(A)(i)(I) being
				less than 6 percentage points or greater than 10 percentage points; and
							(ii)may not result in
				the number of percentage points referred to in paragraph (1)(A)(i)(II) being
				less than 8 percentage points or greater than 12 percentage
				points.
							.
				(c)Points and fees
			 defined
					(1)In
			 generalSection 103(aa)(4) of the Truth in Lending Act (15 U.S.C.
			 1602(aa)(4)) is amended—
						(A)by striking
			 subparagraph (B) and inserting the following:

								(B)all compensation paid directly or
				indirectly by a consumer or creditor to a mortgage originator from any source,
				including a mortgage originator that originates a loan in the name of the
				creditor in a table-funded
				transaction;
								;
						(B)in subparagraph (C)(ii), by inserting
			 except where applied to the charges set forth in section 106(e)(1) where
			 a creditor may receive indirect compensation solely as a result of obtaining
			 distributions of profits from an affiliated entity based on its ownership
			 interest in compliance with section 8(c)(4) of the Real Estate Settlement
			 Procedures Act of 1974 before the semicolon at the end;
						(C)in subparagraph
			 (C)(iii), by striking ; and and inserting , except as
			 provided for in clause (ii);;
						(D)by redesignating
			 subparagraph (D) as subparagraph (G); and
						(E)by inserting after
			 subparagraph (C) the following new subparagraphs:

								(D)premiums or other
				charges payable at or before closing for any credit life, credit disability,
				credit unemployment, or credit property insurance, or any other accident,
				loss-of-income, life or health insurance, or any payments directly or
				indirectly for any debt cancellation or suspension agreement or contract,
				except that insurance premiums or debt cancellation or suspension fees
				calculated and paid in full on a monthly basis shall not be considered financed
				by the creditor;
								(E)except as provided
				in subsection (cc), the maximum prepayment fees and penalties which may be
				charged or collected under the terms of the credit transaction;
								(F)all prepayment
				fees or penalties that are incurred by the consumer if the loan refinances a
				previous loan made or currently held by the same creditor or an affiliate of
				the creditor;
				and
								.
						(2)Calculation of
			 points and fees for open-end consumer credit plansSection
			 103(aa) of the Truth in Lending Act (15 U.S.C. 1602(aa)) is amended—
						(A)by redesignating
			 paragraph (5) as paragraph (6); and
						(B)by inserting after
			 paragraph (4) the following new paragraph:

								(5)Calculation of
				points and fees for open-end consumer credit plansIn
				the case of open-end consumer credit plans, points and fees shall be
				calculated, for purposes of this section and section 129, by adding the total
				points and fees known at or before closing, including the maximum prepayment
				penalties which may be charged or collected under the terms of the credit
				transaction, plus the minimum additional fees the consumer would be required to
				pay to draw down an amount equal to the total credit
				line.
								.
						(d)Bona fide
			 discount loan discount pointsSection 103 of the Truth in Lending
			 Act (15 U.S.C. 1602) is amended by inserting after subsection (cc) (as added by
			 section 101) the following new subsection:

						(dd)Bona fide
				discount points and prepayment penaltiesFor the purposes of determining the amount
				of points and fees for purposes of subsection (aa), either the amounts
				described in paragraph (1) or (2) of the following paragraphs, but not both,
				shall be excluded:
							(1)Up to and including 2 bona fide discount
				points payable by the consumer in connection with the mortgage, but only if the
				interest rate from which the mortgage's interest rate will be discounted does
				not exceed by more than 1 percentage point—
								(A)the required net
				yield for a 90-day standard mandatory delivery commitment for a reasonably
				comparable loan from either the Federal National Mortgage Association or the
				Federal Home Loan Mortgage Corporation, whichever is greater; or
								(B)if secured by a
				personal property loan, the average rate on a loan in connection with which
				insurance is provided under title I of the National Housing Act (12 U.S.C. 1702
				et seq.).
								(2)Unless 2 bona fide discount points have
				been excluded under paragraph (1), up to and including 1 bona fide discount
				point payable by the consumer in connection with the mortgage, but only if the
				interest rate from which the mortgage's interest rate will be discounted does
				not exceed by more than 2 percentage points—
								(A)the required net
				yield for a 90-day standard mandatory delivery commitment for a reasonably
				comparable loan from either the Federal National Mortgage Association or the
				Federal Home Loan Mortgage Corporation, whichever is greater; or
								(B)if secured by a
				personal property loan, the average rate on a loan in connection with which
				insurance is provided under title I of the National Housing Act (12 U.S.C. 1702
				et seq.).
								(3)For purposes of
				paragraph (1), the term bona fide discount points means loan
				discount points which are knowingly paid by the consumer for the purpose of
				reducing, and which in fact result in a bona fide reduction of, the interest
				rate or time-price differential applicable to the mortgage.
							(4)Paragraphs (1) and (2) shall not apply to
				discount points used to purchase an interest rate reduction unless the amount
				of the interest rate reduction purchased is reasonably consistent with
				established industry norms and practices for secondary mortgage market
				transactions.
							.
				302.Amendments to
			 existing requirements for certain mortgages
				(a)Prepayment
			 penalty provisionsSection
			 129(c)(2) of the Truth in Lending Act (15 U.S.C. 1639(c)(2)) is hereby
			 repealed.
				(b)No balloon
			 paymentsSection 129(e) of the Truth in Lending Act (15 U.S.C.
			 1639(e)) is amended to read as follows:

						(e)No Balloon
				PaymentsNo high-cost mortgage may contain a scheduled payment
				that is more than twice as large as the average of earlier scheduled payments.
				This subsection shall not apply when the payment schedule is adjusted to the
				seasonal or irregular income of the
				consumer.
						.
				303.Additional
			 requirements for certain mortgages
				(a)Additional
			 Requirements for Certain MortgagesSection 129 of the Truth in
			 Lending Act (15 U.S.C. 1639) is amended—
					(1)by redesignating
			 subsections (j), (k) and (l) as subsections (n), (o) and (p) respectively;
			 and
					(2)by inserting after
			 subsection (i) the following new subsections:

							(j)Recommended
				DefaultNo creditor shall recommend or encourage default on an
				existing loan or other debt prior to and in connection with the closing or
				planned closing of a high-cost mortgage that refinances all or any portion of
				such existing loan or debt.
							(k)Late
				fees
								(1)In
				generalNo creditor may impose a late payment charge or fee in
				connection with a high-cost mortgage—
									(A)in an amount in
				excess of 4 percent of the amount of the payment past due;
									(B)unless the loan
				documents specifically authorize the charge or fee;
									(C)before the end of
				the 15-day period beginning on the date the payment is due, or in the case of a
				loan on which interest on each installment is paid in advance, before the end
				of the 30-day period beginning on the date the payment is due; or
									(D)more than once
				with respect to a single late payment.
									(2)Coordination
				with subsequent late feesIf 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 delinquency charge may be imposed on such
				payment.
								(3)Failure to make
				installment paymentIf, in the case of a loan agreement the terms
				of which provide that any payment shall first be applied to any past due
				principal balance, the consumer fails to make an installment payment and the
				consumer subsequently resumes making installment payments but has not paid all
				past due installments, the creditor may impose a separate late payment charge
				or fee for any principal due (without deduction due to late fees or related
				fees) until the default is cured.
								(l)Acceleration of
				DebtNo high-cost mortgage
				may contain a provision which permits the creditor to accelerate the
				indebtedness, except when repayment of the loan has been accelerated by default
				in payment, or pursuant to a due-on-sale provision, or pursuant to a material
				violation of some other provision of the loan document unrelated to payment
				schedule.
							(m)Restriction on
				financing points and feesNo creditor may directly or indirectly
				finance, in connection with any high-cost mortgage, any of the
				following:
								(1)Any prepayment fee
				or penalty payable by the consumer in a refinancing transaction if the creditor
				or an affiliate of the creditor is the noteholder of the note being
				refinanced.
								(2)Any points or
				fees.
								.
					(b)Prohibitions on
			 evasionsSection 129 of the Truth in Lending Act (15 U.S.C. 1639)
			 is amended by inserting after subsection (p) (as so redesignated by subsection
			 (a)(1)) the following new subsection:

						(q)Prohibitions on
				evasions, structuring of transactions, and reciprocal
				arrangementsA creditor may not take any action in connection
				with a high-cost mortgage—
							(1)to structure a
				loan transaction as an open-end credit plan or another form of loan for the
				purpose and with the intent of evading the provisions of this title; or
							(2)to divide any loan
				transaction into separate parts for the purpose and with the intent of evading
				provisions of this
				title.
							.
				(c)Modification or
			 Deferral FeesSection 129 of the Truth in Lending Act (15 U.S.C.
			 1639) is amended by inserting after subsection (q) (as added by subsection (b)
			 of this section) the following new subsection:

						(r)Modification and
				deferral fees prohibited
							(1)CreditorsA creditor may not charge a consumer any
				fee to modify, renew, extend, or amend a high-cost mortgage, or to defer any
				payment due under the terms of such mortgage, unless the modification, renewal,
				extension or amendment results in a lower annual percentage rate on the
				mortgage for the consumer and then only if the amount of the fee is comparable
				to fees imposed for similar transactions in connection with consumer credit
				transactions that are secured by a consumer's principal dwelling and are not
				high-cost mortgages.
							(2)Third
				partiesA third-party may not
				charge a consumer any fee to—
								(A)modify, renew,
				extend, or amend a high-cost mortgage, or defer any payment due under the terms
				of such mortgage;
								(B)negotiate with a
				creditor on behalf of a consumer, the modification, renewal, extension, or
				amendment of a high-cost mortgage; or
								(C)negotiate with a
				creditor on behalf of a consumer, the deferral of any payment due under the
				terms of such mortgage,
								unless the
				modification renewal, extension or amendment results in a significantly lower
				annual percentage rate on the mortgage, or a significant reduction in the
				amount of the outstanding principal on the mortgage, for the consumer and then
				only if the amount of the fee is comparable to fees imposed for similar
				transactions in connection with consumer credit transactions that are secured
				by a consumer's principal dwelling and are not high-cost mortgages.(3)EnforcementSection
				130 shall be applied for purposes of paragraph (2) by—
								(A)substituting
				third party for creditoreach place such term
				appears; and
								(B)substituting
				any fee charged by a third party for finance
				charge each place such term
				appears.
								.
				(d)Payoff
			 statementSection 129 of the Truth in Lending Act (15 U.S.C.
			 1639) is amended by inserting after subsection (r) (as added by subsection (c)
			 of this section) the following new subsection:

						(s)Payoff
				statement
							(1)Fees
								(A)In
				generalExcept as provided in subparagraph (B), no creditor or
				servicer may charge a fee for informing or transmitting to any person the
				balance due to pay off the outstanding balance on a high-cost mortgage.
								(B)Transaction
				feeWhen payoff information referred to in subparagraph (A) is
				provided by facsimile transmission or by a courier service, a creditor or
				servicer may charge a processing fee to cover the cost of such transmission or
				service in an amount not to exceed an amount that is comparable to fees imposed
				for similar services provided in connection with consumer credit transactions
				that are secured by the consumer's principal dwelling and are not high-cost
				mortgages.
								(C)Fee
				disclosurePrior to charging a transaction fee as provided in
				subparagraph (B), a creditor or servicer shall disclose that payoff balances
				are available for free pursuant to subparagraph (A).
								(D)Multiple
				requestsIf a creditor or servicer has provided payoff
				information referred to in subparagraph (A) without charge, other than the
				transaction fee allowed by subparagraph (B), on 4 occasions during a calendar
				year, the creditor or servicer may thereafter charge a reasonable fee for
				providing such information during the remainder of the calendar year.
								(2)Prompt
				deliveryPayoff balances shall be provided within 5 business days
				after receiving a request by a consumer or a person authorized by the consumer
				to obtain such information.
							(3)Services
				considered assigneeFor the
				purposes of this subsection, a servicer shall be considered an assignee under
				the Truth in Lending
				Act.
							.
				(e)Pre-Loan
			 Counseling RequiredSection 129 of the Truth in Lending Act (15
			 U.S.C. 1639) is amended by inserting after subsection (s) (as added by
			 subsection (d) of this section) the following new subsection:

						(t)Pre-Loan
				Counseling
							(1)In
				generalA creditor may not extend credit to a consumer under a
				high-cost mortgage without first receiving certification from a counselor that
				is approved by the Secretary of Housing and Urban Development, or at the
				discretion of the Secretary, a State housing finance authority, that the
				consumer has received counseling on the advisability of the mortgage. Such
				counselor shall not be employed by the creditor or an affiliate of the creditor
				or be affiliated with the creditor.
							(2)Disclosures
				required prior to counselingNo counselor may certify that a
				consumer has received counseling on the advisability of the high-cost mortgage
				unless the counselor can verify that the consumer has received each statement
				required (in connection with such loan) by this section or the Real Estate
				Settlement Procedures Act of 1974 with respect to the transaction.
							(3)RegulationsThe
				Board may prescribe such regulations as the Board determines to be appropriate
				to carry out the requirements of paragraph
				(1).
							.
				(f)Flipping
			 prohibitedSection 129 of the
			 Truth in Lending Act (15 U.S.C. 1639) is amended by inserting after subsection
			 (t) (as added by subsection (e)) the following new subsection:

						(u)Flipping
							(1)In
				generalNo creditor may knowingly or intentionally engage in the
				unfair act or practice of flipping in connection with a high-cost
				mortgage.
							(2)Flipping
				definedFor purposes of this
				subsection, the term flipping means the making of a loan or
				extension of credit in the form a high-cost mortgage to a consumer which
				refinances an existing mortgage when the new loan or extension of credit does
				not have reasonable, net tangible benefit (as determined in accordance with
				regulations prescribed under section 129C(b)) to the consumer considering all
				of the circumstances, including the terms of both the new and the refinanced
				loans or credit, the cost of the new loan or credit, and the consumer's
				circumstances.
							(v)Corrections and
				unintentional violationsA
				creditor or assignee in a high cost loan who, when acting in good faith, fails
				to comply with any requirement under this section will not be deemed to have
				violated such requirement if the creditor or assignee establishes that
				either—
							(1)within 30 days of
				the loan closing and prior to the institution of any action, the consumer is
				notified of or discovers the violation, appropriate restitution is made, and
				whatever adjustments are necessary are made to the loan to either, at the
				choice of the consumer—
								(A)make the loan
				satisfy the requirements of this chapter; or
								(B)in the case of a
				high-cost mortgage, change the terms of the loan in a manner beneficial to the
				consumer so that the loan will no longer be a high-cost mortgage; or
								(2)within 60 days of
				the creditor's discovery or receipt of notification of an unintentional
				violation or bona fide error as described in subsection (c) and prior to the
				institution of any action, the consumer is notified of the compliance failure,
				appropriate restitution is made, and whatever adjustments are necessary are
				made to the loan to either, at the choice of the consumer—
								(A)make the loan
				satisfy the requirements of this chapter; or
								(B)in the case of a
				high-cost mortgage, change the terms of the loan in a manner beneficial so that
				the loan will no longer be a high-cost
				mortgage.
								.
				304.Regulations
				(a)In
			 GeneralThe Board of Governors of the Federal Reserve System
			 shall publish regulations implementing this title and the amendments made by
			 this title in final form before the end of the 6-month period beginning on the
			 date of the enactment of this Act.
				(b)Consumer
			 Mortgage Education
					(1)RegulationsThe Board of Governors of the Federal
			 Reserve System may prescribe regulations requiring or encouraging creditors to
			 provide consumer mortgage education to prospective customers or direct such
			 customers to qualified consumer mortgage education or counseling programs in
			 the vicinity of the residence of the consumer.
					(2)Coordination
			 with state lawNo requirement established by the Board of
			 Governors of the Federal Reserve System pursuant to paragraph (1) shall be
			 construed as affecting or superseding any requirement under the law of any
			 State with respect to consumer mortgage counseling or education.
					305.Effective
			 dateThe 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 and shall apply to mortgages referred to in
			 section 103(aa) of the Truth in Lending Act (15 U.S.C. 1602(aa)) for which an
			 application is received by the creditor after the end of such period.
			IVOffice of Housing
			 Counseling
			401.Short
			 titleThis title may be cited
			 as the Expand and Preserve Home
			 Ownership Through Counseling Act.
			402.Establishment
			 of Office of Housing CounselingSection 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)EstablishmentThere
				is established, in the Department, the Office of Housing Counseling.
						(2)DirectorThere
				is established the position of Director of Housing Counseling. The Director
				shall be the head of the Office of Housing Counseling and shall be appointed
				by, and shall report to, the Secretary. Such position shall be a
				career-reserved position in the Senior Executive Service.
						(3)Functions
							(A)In
				generalThe Director shall have primary responsibility within the
				Department for all activities and matters relating to homeownership counseling
				and rental housing counseling, including—
								(i)research, grant
				administration, public outreach, and policy development relating to such
				counseling; and
								(ii)establishment,
				coordination, and administration of all regulations, requirements, standards,
				and performance measures under programs and laws administered by the Department
				that relate to housing counseling, homeownership counseling (including
				maintenance of homes), mortgage-related counseling (including home equity
				conversion mortgages and credit protection options to avoid foreclosure), and
				rental housing counseling, including the requirements, standards, and
				performance measures relating to housing counseling.
								(B)Specific
				functionsThe Director shall
				carry out the functions assigned to the Director and the Office under this
				section and any other provisions of law. Such functions shall include
				establishing rules necessary for—
								(i)the counseling
				procedures under section 106(g)(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(g) of the
				Housing and Urban Development Act of
				1968, including the establishment, operation, and publication of the
				availability of the toll-free telephone number under paragraph (2) of such
				section;
								(iii)contributing to the preparation and
				distribution of home buying information booklets pursuant to section 5 of the
				Real Estate Settlement Procedures Act of 1974 (12 U.S.C. 2604);
								(iv)carrying out the
				certification program under section 106(e) of the
				Housing and Urban Development Act of
				1968 (12 U.S.C. 1701x(e));
								(v)carrying out the
				assistance program under section 106(a)(4) of the
				Housing and Urban Development Act of
				1968, including criteria for selection of applications to receive
				assistance;
								(vi)carrying out any
				functions regarding abusive, deceptive, or unscrupulous lending practices
				relating to residential mortgage loans that the Secretary considers
				appropriate, which shall include conducting the study under section 6 of the
				Expand and Preserve Home Ownership Through Counseling Act;
								(vii)providing for
				operation of the advisory committee established under paragraph (4) of this
				subsection;
								(viii)collaborating
				with community-based organizations with expertise in the field of housing
				counseling; and
								(ix)providing for the building of capacity to
				provide housing counseling services in areas that lack sufficient services,
				including underdeveloped areas that lack basic water and sewer systems,
				electricity services, and safe, sanitary housing.
								(4)Advisory
				Committee
							(A)In
				generalThe Secretary shall appoint an advisory committee to
				provide advice regarding the carrying out of the functions of the
				Director.
							(B)MembersSuch
				advisory committee shall consist of not more than 12 individuals, and the
				membership of the committee shall equally represent the mortgage and real
				estate industry, including consumers and housing counseling agencies certified
				by the Secretary.
							(C)TermsExcept
				as provided in subparagraph (D), each member of the advisory committee shall be
				appointed for a term of 3 years. Members may be reappointed at the discretion
				of the Secretary.
							(D)Terms of initial
				appointeesAs designated by the Secretary at the time of
				appointment, of the members first appointed to the advisory committee, 4 shall
				be appointed for a term of 1 year and 4 shall be appointed for a term of 2
				years.
							(E)Prohibition of
				pay; travel expensesMembers of the advisory committee shall
				serve without pay, but shall receive travel expenses, including per diem in
				lieu of subsistence, in accordance with applicable provisions under subchapter
				I of chapter 57 of title 5, United States Code.
							(F)Advisory role
				onlyThe advisory committee shall have no role in reviewing or
				awarding housing counseling grants.
							(5)Scope of
				homeownership counselingIn carrying out the responsibilities of
				the Director, the Director shall ensure that homeownership counseling provided
				by, in connection with, or pursuant to any function, activity, or program of
				the Department addresses the entire process of homeownership, 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 foreclosure, and other financial decisions), and the
				sale or other disposition of a
				home.
						.
			403.Counseling
			 procedures
				(a)In
			 generalSection 106 of the Housing
			 and Urban Development Act of 1968 (12 U.S.C. 1701x) is amended by
			 adding at the end the following new subsection:

						(g)Procedures and
				activities
							(1)Counseling
				procedures
								(A)In
				generalThe Secretary shall establish, coordinate, and monitor
				the administration by the Department of Housing and Urban Development of the
				counseling procedures 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
				counselingFor 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 residential
				mortgage loans. Such term includes counseling related to homeownership and
				residential mortgage loans 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));
									(ii)in the
				United States Housing Act of
				1937—
										(I)section 9(e) (42
				U.S.C. 1437g(e));
										(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 American Homeownership and Economic Opportunity 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, 1701w(e));
									(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
				subsection (b), subsection (c)(2)(A), and subsection (r)(4);
										(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));
									(xii)section 508 of
				the Housing and Urban Development Act
				of 1970 (12 U.S.C. 1701z–7); and
									(xiii)section 106 of the Energy Policy Act of
				1992 (42 U.S.C. 12712 note).
									(C)Rental housing
				counselingFor purposes of this subsection, the term rental
				housing counseling means counseling related to rental of residential
				property, which may include counseling regarding future homeownership
				opportunities and providing referrals for renters and prospective renters to
				entities providing 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));
									(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 Cranston-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 Cranston-Gonzalez National Affordable
				Housing Act (42 U.S.C. 12872(b)(6));
									(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 Housing Act of 1937 (42 U.S.C. 1437f).
									(2)Standards for
				materialsThe Secretary, in
				consultation with the advisory committee established under subsection (g)(4) of
				the Department of Housing and Urban Development Act, shall establish standards
				for materials and forms to be used, as appropriate, by organizations providing
				homeownership counseling services, including any recipients of assistance
				pursuant to subsection (a)(4).
							(3)Mortgage
				software systems
								(A)CertificationThe
				Secretary shall provide for the certification of various computer software
				programs for consumers to use in evaluating different residential mortgage loan
				proposals. The Secretary shall require, for such certification, that the
				mortgage software systems take into account—
									(i)the consumer’s
				financial situation and the cost of maintaining a home, including 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; and
									(iii)such other
				factors as the Secretary 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.
									If the
				Secretary determines that available existing software is inadequate to assist
				consumers during the residential mortgage loan application process, the
				Secretary shall arrange for the development by private sector software
				companies of new mortgage software systems that meet the Secretary’s
				specifications.(B)Use and initial
				availabilitySuch certified computer software programs shall be
				used to supplement, not replace, housing counseling. The Secretary shall
				provide that such programs are initially used only in connection with the
				assistance of housing counselors certified pursuant to subsection (e).
								(C)AvailabilityAfter
				a period of initial 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 libraries,
				senior-citizen centers, public housing sites, offices of public housing
				agencies that administer rental housing assistance vouchers, and housing
				counseling centers.
								(D)Budget
				complianceThis paragraph
				shall be effective only to the extent that amounts to carry out this paragraph
				are made available in advance in appropriations Acts.
								(4)National public
				service multimedia campaigns to promote housing counseling
								(A)In
				generalThe Director of
				Housing Counseling shall develop, implement, and conduct national public
				service multimedia campaigns designed to make persons facing mortgage
				foreclosure, persons considering a subprime mortgage loan to purchase a home,
				elderly persons, persons who face language barriers, low-income persons,
				minorities, and other potentially vulnerable consumers aware that it is
				advisable, before seeking or maintaining a residential mortgage loan, to obtain
				homeownership counseling from an unbiased and reliable sources and that such
				homeownership counseling is available, including through programs sponsored by
				the Secretary of Housing and Urban Development.
								(B)Contact
				informationEach segment of
				the multimedia campaign under subparagraph (A) shall publicize the toll-free
				telephone number and website of the Department of Housing and Urban Development
				through which persons seeking housing counseling can locate a housing
				counseling agency in their State that is certified by the Secretary of Housing
				and Urban Development and can provide advice on buying a home, renting,
				defaults, foreclosures, credit issues, and reverse mortgages.
								(C)Authorization of
				appropriationsThere are
				authorized to be appropriated to the Secretary, not to exceed $3,000,000 for
				fiscal years 2009, 2010, and 2011, for the development, implementation, and
				conduct of national public service multimedia campaigns under this
				paragraph.
								(D)Foreclosure
				rescue education programs
									(i)In
				generalTen percent of any
				funds appropriated pursuant to the authorization under subparagraph (C) shall
				be used by the Director of Housing Counseling to conduct an education program
				in areas that have a high density of foreclosure. Such program shall involve
				direct mailings to persons living in such areas describing—
										(I)tips on avoiding
				foreclosure rescue scams;
										(II)tips on avoiding
				predatory lending mortgage agreements;
										(III)tips on avoiding
				for-profit foreclosure counseling services; and
										(IV)local counseling
				resources that are approved by the Department of Housing and Urban
				Development.
										(ii)Program
				emphasisIn conducting the education program described under
				clause (i), the Director of Housing Counseling shall also place an emphasis on
				serving communities that have a high percentage of retirement communities or a
				high percentage of low-income minority communities.
									(iii)Terms
				definedFor purposes of this
				subparagraph:
										(I)High density of
				foreclosuresAn area has a
				high density of foreclosures if such area is one of the
				metropolitan statistical areas (as that term is defined by the Director of the
				Office of Management and Budget) with the highest home foreclosure
				rates.
										(II)High percentage
				of retirement communitiesAn
				area has a high percentage of retirement communities if such area
				is one of the metropolitan statistical areas (as that term is defined by the
				Director of the Office of Management and Budget) with the highest percentage of
				residents aged 65 or older.
										(III)High
				percentage of low-income minority communitiesAn area has a
				high percentage of low-income minority communities if such area
				contains a higher-than-normal percentage of residents who are both minorities
				and low-income, as defined by the Director of Housing Counseling.
										(5)Education
				programsThe Secretary shall
				provide advice and technical assistance to States, units of general local
				government, and nonprofit organizations regarding the establishment and
				operation of, including assistance with the development of content and
				materials for, educational programs 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,
				minorities, and other potentially vulnerable consumers), regarding home
				mortgages, mortgage refinancing, home equity loans, home repair loans, and
				where appropriate by region, any requirements and costs associated with
				obtaining flood or other disaster-specific insurance
				coverage.
							.
				(b)Conforming
			 amendments to grant program for homeownership counseling
			 organizationsSection 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
			 (III), by striking and at the end;
					(2)in subclause (IV)
			 by striking the period at the end and inserting ; and;
			 and
					(3)by inserting after
			 subclause (IV) the following new subclause:

							(V)notify the housing
				or mortgage applicant of the availability of mortgage software systems provided
				pursuant to subsection
				(g)(3).
							.
					404.Grants for
			 housing counseling assistanceSection 106(a) of the
			 Housing and Urban Development 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 counseling
				assistance
						(A)In generalThe
				Secretary shall make financial assistance available under this paragraph to
				HUD-approved housing counseling agencies and State housing finance
				agencies.
						(B)Qualified entitiesThe
				Secretary shall establish standards and guidelines for eligibility of
				organizations (including governmental and nonprofit organizations) to receive
				assistance under this paragraph, in accordance with subparagraph (D).
						(C)DistributionAssistance made available under this
				paragraph shall be distributed in a manner that encourages efficient and
				successful counseling programs and that ensures adequate distribution of
				amounts for rural areas having traditionally low levels of access to such
				counseling services, including areas with insufficient access to the Internet.
				In distributing such assistance, the Secretary may give priority consideration
				to entities serving areas with the highest home foreclosure rates.
						(D)Limitation on distribution of
				assistance
							(i)In generalNone of the amounts made available under
				this paragraph shall be distributed to—
								(I)any organization which has been convicted
				for a violation under Federal law relating to an election for Federal office;
				or
								(II)any organization which employs
				applicable individuals.
								(ii)Definition of applicable
				individualsIn this
				subparagraph, the term applicable individual means an individual
				who—
								(I)is—
									(aa)employed by the organization in a
				permanent or temporary capacity;
									(bb)contracted or retained by the
				organization; or
									(cc)acting on behalf of, or with the
				express or apparent authority of, the organization; and
									(II)has been convicted for a violation under
				Federal law relating to an election for Federal office.
								(E)Grantmaking processIn making assistance available under this
				paragraph, the Secretary shall consider appropriate ways of streamlining and
				improving the processes for grant application, review, approval, and
				award.
						(F)Authorization of
				appropriationsThere are authorized to be appropriated
				$45,000,000 for each of fiscal years 2009 through 2012 for—
							(i)the operations of the Office of
				Housing Counseling of the Department of Housing and Urban Development;
							(ii)the responsibilities of the
				Director of Housing Counseling under paragraphs (2) through (5) of subsection
				(g); and
							(iii)assistance pursuant to this
				paragraph for entities providing homeownership and rental
				counseling.
							.
			405.Requirements to
			 use HUD-certified counselors under HUD programsSection 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
				assistanceAn organization 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 organizations before the period at the end of
			 the first sentence; and
					(B)in the second
			 sentence by striking for certification and inserting ,
			 for certification of an organization, that each individual through which the
			 organization provides counseling shall demonstrate, and, for certification of
			 an individual,;
					(3)in paragraph (3),
			 by inserting organizations and before
			 individuals;
				(4)by redesignating
			 paragraph (3) as paragraph (5); and
				(5)by inserting after
			 paragraph (2) the following new paragraphs:

						(3)Requirement
				under hud programsAny homeownership counseling or rental housing
				counseling (as such terms are defined in subsection (g)(1)) required under, or
				provided in connection with, any program administered by the Department of
				Housing and Urban Development shall be provided only by organizations or
				counselors certified by the Secretary under this subsection as competent to
				provide such counseling.
						(4)OutreachThe
				Secretary shall take such actions as the Secretary considers appropriate to
				ensure that individuals and organizations providing homeownership or rental
				housing counseling are aware of the certification requirements and standards of
				this subsection and of the training and certification programs under subsection
				(f).
						.
				406.Study of
			 defaults and foreclosuresThe
			 Secretary of Housing and Urban Development shall conduct an extensive study of
			 the root causes of default and foreclosure of home loans, using as much
			 empirical data as are available. The study shall also examine the role of
			 escrow accounts in helping prime and nonprime borrowers to avoid defaults and
			 foreclosures, and the role of computer registries of mortgages, including those
			 used for trading mortgage loans. Not later than 12 months after the date of the
			 enactment of this Act, the Secretary shall submit to the Congress a preliminary
			 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.
			407.Default and
			 foreclosure database
				(a)EstablishmentThe Secretary of Housing and Urban
			 Development, in consultation with the Federal agencies responsible for
			 regulation of banking and financial institutions involved in residential
			 mortgage lending and servicing, shall establish and maintain a database of
			 information on foreclosures and defaults on mortgage loans for one- to
			 four-unit residential properties and shall make such information publicly
			 available.
				(b)Census tract
			 dataInformation in the database shall be collected, aggregated,
			 and made available on a census tract basis.
				(c)RequirementsInformation
			 collected and made available through the database shall include—
					(1)the number and percentage of such mortgage
			 loans that are delinquent by more than 30 days;
					(2)the number and
			 percentage of such mortgage loans that are delinquent by more than 90
			 days;
					(3)the number and
			 percentage of such properties that are real estate-owned;
					(4)number and
			 percentage of such mortgage loans that are in the foreclosure process;
					(5)the number and
			 percentage of such mortgage loans that have an outstanding principal obligation
			 amount that is greater than the value of the property for which the loan was
			 made; and
					(6)such other
			 information as the Secretary considers appropriate.
					408.Definitions for
			 counseling-related programsSection 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 further amended by adding at the end the following new subsection:

					(h)DefinitionsFor
				purposes of this section:
						(1)Nonprofit
				organizationThe term nonprofit organization has the
				meaning given such term in section 104(5) of the
				Cranston-Gonzalez 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.
						(2)StateThe
				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 Islands, American Samoa, the Trust Territories of the
				Pacific, or any other possession of the United States.
						(3)Unit of general
				local governmentThe term unit of general local
				government means any city, county, parish, town, township, borough,
				village, or other general purpose political subdivision of a State.
						(4)HUD-approved
				counseling agencyThe term
				HUD-approved counseling agency means a private or public nonprofit
				organization that is—
							(A)exempt from
				taxation under section 501(c) of the Internal Revenue Code of 1986; and
							(B)certified by the
				Secretary to provide housing counseling services.
							(5)State housing
				finance agencyThe term State housing finance agency
				means any public body, agency, or instrumentality specifically created under
				State statute that is authorised to finance activities designed to provide
				housing and related facilities throughout an entire State through land
				acquisition, construction, or rehabilitation.
						.
			409.Accountability
			 and transparency for grant recipientsSection 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 further amended by adding at the end the
			 following:

					(i)Accountability
				for recipients of covered assistance
						(1)Tracking of
				fundsThe Secretary
				shall—
							(A)develop and maintain a system to ensure
				that any organization or entity that receives any covered assistance uses all
				amounts of covered assistance in accordance with this section or section 216 of
				the Mortgage Reform and Anti-Predatory Lending Act, as applicable, the
				regulations issued under this section or such section 216, as applicable, and
				any requirements or conditions under which such amounts were provided;
				and
							(B)require any organization or entity, as a
				condition of receipt of any covered assistance, to agree to comply with such
				requirements regarding covered assistance as the Secretary shall establish,
				which shall include—
								(i)appropriate periodic financial and grant
				activity reporting, record retention, and audit requirements for the duration
				of the covered assistance to the organization or entity to ensure compliance
				with the limitations and requirements of this section or section 216 of the
				Mortgage Reform and Anti-Predatory Lending Act, as applicable, the regulations
				under this section or such section 216, as applicable, and any requirements or
				conditions under which such amounts were provided; and
								(ii)any other
				requirements that the Secretary determines are necessary to ensure appropriate
				administration and compliance.
								(2)Misuse of
				fundsIf any organization or
				entity that receives any covered assistance is determined by the Secretary to
				have used any covered assistance in a manner that is materially in violation of
				this section or section 216 of the Mortgage Reform and Anti-Predatory Lending
				Act, as applicable, the regulations issued under this section or such section
				216, as applicable, or any requirements or conditions under which such
				assistance was provided—
							(A)the Secretary
				shall require that, within 12 months after the determination of such misuse,
				the organization or entity shall reimburse the Secretary for such misused
				amounts and return to the Secretary any such amounts that remain unused or
				uncommitted for use; and
							(B)such organization or entity shall be
				ineligible, at any time after such determination, to apply for or receive any
				further covered assistance.
							The
				remedies under this paragraph are in addition to any other remedies that may be
				available under law.(3)Covered
				assistanceFor purposes of
				this subsection, the term covered assistance means any grant or
				other financial assistance provided under—
							(A)this section; or
							(B)section 216 of the
				Mortgage Reform and Anti-Predatory Lending
				Act.
							.
			410.Updating and
			 simplification of mortgage information bookletSection 5 of the Real Estate Settlement
			 Procedures Act of 1974 (12 U.S.C. 2604) is amended—
				(1)in the section
			 heading, by striking special and inserting
			 home
			 buying;
				(2)by striking
			 subsections (a) and (b) and inserting the following new subsections:

						(a)Preparation and
				distributionThe Secretary 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 booklet in various languages and cultural
				styles, as the Secretary determines to be appropriate, so that the booklet is
				understandable and accessible to homebuyers of different ethnic and cultural
				backgrounds. The Secretary shall distribute such booklets to all lenders that
				make federally related mortgage loans. The Secretary shall also distribute 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 requirement under subsection (c) of this section.
						(b)ContentsEach
				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 following information:
							(1)A description and
				explanation of the nature and purpose of the costs incident to a real estate
				settlement or a federally related mortgage loan. The description and
				explanation shall provide general information about the mortgage process as
				well as specific information concerning, at a minimum—
								(A)balloon
				payments;
								(B)prepayment
				penalties;
								(C)the advantages of prepayment; and
								(D)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 unfair 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 consumer 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 variable rate mortgage and a reference to the
				booklet entitled Consumer Handbook on Adjustable Rate Mortgages,
				published by the Board of Governors of the Federal Reserve System pursuant to
				section 226.19(b)(1) of title 12, Code of Federal Regulations, 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 counseling 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 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
				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 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 necessary services incidental to a real estate settlement.
							(11)An explanation of
				a consumer’s responsibilities, liabilities, 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 consideration
				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 counselors 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 HUD-issued booklet in the version that is
			 most appropriate for the person receiving it..
				411.Home inspection
			 counseling
				(a)Public
			 outreach
					(1)In
			 generalThe 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.
						(2)AvailabilityThe
			 Secretary shall make the materials specified in paragraph (1) available for
			 electronic access and, where appropriate, inform potential homebuyers of such
			 availability through home purchase counseling public service announcements and
			 toll-free telephone hotlines of the Department 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)UpdatingThe
			 Secretary may periodically update and revise such materials, as the Secretary
			 determines to be appropriate.
					(b)Requirement for
			 FHA-approved lendersEach mortgagee approved for participation in
			 the mortgage insurance programs under title II of the National Housing Act
			 shall provide prospective homebuyers, at first contact, whether upon
			 pre-qualification, pre-approval, or initial application, the materials
			 specified in subparagraphs (A), (B), and (D) of subsection (a)(1).
				(c)Requirements for
			 HUD-approved counseling agenciesEach 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 materials
			 specified in subparagraphs (C) and (D) of subsection (a)(1).
				(d)TrainingTraining
			 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 homebuyers of the availability and
			 importance of getting an independent 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 homebuyers on how to locate and select a
			 qualified home inspector; and
					(4)review of home
			 inspection public outreach materials of the Department.
					412.Warnings to
			 homeowners of foreclosure rescue scams
				(a)Assistance to
			 NRCNotwithstanding 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 404 of this Act), 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 borrowers under such loans who are delinquent with respect to
			 payments due under such loans that makes such borrowers aware of the dangers of
			 fraudulent activities associated with foreclosure.
				(b)NoticeThe
			 Neighborhood Reinvestment Corporation, in consultation with servicers of
			 residential mortgage loans, shall use the amounts provided pursuant to
			 subsection (a) to carry out activities to inform borrowers under residential
			 mortgage loans—
					(1)that the
			 foreclosure process is complex and can be confusing;
					(2)that the borrower
			 may be approached during the foreclosure process by persons regarding saving
			 their home and they should use caution in any such dealings;
					(3)that there are
			 Federal Government and nonprofit agencies that may provide information about
			 the foreclosure process, including the Department of Housing and Urban
			 Development;
					(4)that they should contact their lender
			 immediately, contact 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 successor, the telephone number of the
			 Department of Housing and Urban Development housing counseling line, and the
			 Uniform Resource Locators (URLs) for the Department of Housing and Urban
			 Development websites for housing counseling and for tips for avoiding
			 foreclosure.
					VMortgage
			 Servicing
			501.Escrow and impound
			 accounts relating to certain consumer credit transactions
				(a)In
			 generalChapter 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 201) the
			 following new section:

						129D.Escrow or
				impound accounts relating to certain consumer credit transactions
							(a)In
				generalExcept as provided in subsection (b), (c), or (d) , a
				creditor, in connection with the formation or 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
				requiredNo 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
				principal obligation amount that—
									(A)does not exceed
				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 for a
				comparable transaction 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 for a
				comparable transaction by 2.5 or more percentage points; or
									(4)so required
				pursuant to regulation.
								(c)Duration of
				mandatory escrow or impound accountAn 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, and
				until 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, or such other period as may be provided in regulations to address
				situations such as borrower delinquency, unless the underlying mortgage
				establishing the account is terminated.
							(d)Limited
				exemptions for loans secured by shares in a cooperative and for certain
				condominium unitsEscrow
				accounts need not be established for loans secured by shares in a cooperative.
				Insurance premiums need not be included in escrow accounts for loans secured by
				condominium units, where the condominium association has an obligation to the
				condominium unit owners to maintain a master policy insuring condominium
				units.
							(e)Clarification on
				escrow accounts for loans not meeting statutory testFor
				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
								(3)pursuant to the requirements for the
				escrowing of flood insurance payments for regulated lending institutions in
				section 102(d) of the Flood Disaster Protection Act of 1973.
								(f)Administration
				of mandatory escrow or impound accounts
								(1)In
				generalExcept as may otherwise be provided for in this title or
				in regulations prescribed by the Board, escrow or impound accounts established
				pursuant to subsection (b) shall be established in a federally insured
				depository institution.
								(2)AdministrationExcept
				as provided in this section or regulations prescribed under this section, an
				escrow or impound account subject to this section shall be administered in
				accordance with—
									(A)the Real Estate
				Settlement Procedures Act of 1974 and regulations prescribed under such
				Act;
									(B)the Flood Disaster
				Protection Act of 1973 and regulations prescribed under such Act; and
									(C)the law of the
				State, if applicable, where the real property securing the consumer credit
				transaction is located.
									(3)Applicability of
				payment of interestIf prescribed by applicable State or Federal
				law, each creditor shall pay interest to the consumer on the amount held in any
				impound, trust, or escrow account that is subject to this section in the manner
				as prescribed by that applicable State or Federal law.
								(4)Penalty
				coordination with RESPAAny
				action or omission on the part of any person which constitutes a violation of
				the Real Estate Settlement Procedures Act of 1974 or any regulation prescribed
				under such Act for which the person has paid any fine, civil money penalty, or
				other damages shall not give rise to any additional fine, civil money penalty,
				or other damages under this section, unless the action or omission also
				constitutes a direct violation of this section.
								(g)Disclosures
				relating to mandatory escrow or impound accountIn the case of
				any impound, trust, or escrow account that is subject to this section, the
				creditor shall disclose by written notice to the consumer at least 3 business
				days before the consummation of the consumer credit transaction giving rise to
				such account or in accordance with timeframes established in prescribed
				regulations the following information:
								(1)The fact that an
				escrow or impound account will be established at consummation of the
				transaction.
								(2)The amount
				required at closing to initially fund the escrow or impound account.
								(3)The amount, in the
				initial year after the consummation of the transaction, of the estimated taxes
				and hazard insurance, including flood insurance, if applicable, and any other
				required periodic payments or premiums that reflects, as appropriate, either
				the taxable assessed value of the real property securing the transaction,
				including the value of any improvements on the property or to be constructed on
				the property (whether or not such construction will be financed from the
				proceeds of the transaction) or the replacement costs of the property.
								(4)The estimated
				monthly amount payable to be escrowed for taxes, hazard insurance (including
				flood insurance, if applicable) and any other required periodic payments or
				premiums.
								(5)The fact that, if
				the consumer chooses to terminate the account at the appropriate time in the
				future, the consumer will become responsible for the payment of all taxes,
				hazard insurance, and flood insurance, if applicable, as well as any other
				required periodic payments or premiums on the property unless a new escrow or
				impound account is established.
								(6)Such other information as the Federal
				banking agencies jointly determine necessary for the protection of the
				consumer.
								(h)DefinitionsFor
				purposes of this section, the following definitions shall apply:
								(1)Flood
				insuranceThe term flood insurance means flood
				insurance coverage provided under the national flood insurance program pursuant
				to the National Flood Insurance Act of 1968.
								(2)Hazard
				insuranceThe term hazard insurance shall have the
				same meaning as provided for hazard insurance, casualty
				insurance, homeowner’s insurance, or other similar term
				under the law of the State where the real property securing the consumer credit
				transaction is
				located.
								.
				(b)Implementation
					(1)RegulationsThe Board of Governors of the Federal
			 Reserve System, the Comptroller of the Currency, the Director of the Office of
			 Thrift Supervision, the Federal Deposit Insurance Corporation, the National
			 Credit Union Administration Board, (hereafter in this Act referred to as the
			 Federal banking agencies) and the Federal Trade Commission shall
			 prescribe, in final form, such regulations as determined to be necessary to
			 implement the amendments made by subsection (a) before the end of the 180-day
			 period beginning on the date of the enactment of this Act.
					(2)Effective
			 dateThe amendments made by subsection (a) shall only apply to
			 covered mortgage loans consummated after the end of the 1-year period beginning
			 on the date of the publication of final regulations in the Federal
			 Register.
					(c)Clerical
			 AmendmentThe table of
			 sections for chapter 2 of the Truth in Lending Act is amended by inserting
			 after the item relating to section 129C (as added by section 201) the following
			 new item:

							129D. Escrow or impound accounts relating
				to certain consumer credit
				transactions.

						.
				502.Disclosure
			 notice required for consumers who waive escrow services
				(a)In
			 generalSection 129D of the
			 Truth in Lending Act (as added by section 501) is amended by adding at the end
			 the following new subsection:

						(i)Disclosure
				notice required for consumers who waive escrow services
							(1)In
				generalIf—
								(A)an impound, trust,
				or other type of account for the payment of property taxes, insurance premiums,
				or other purposes relating to real property securing a consumer credit
				transaction is not established in connection with the transaction; or
								(B)a consumer
				chooses, and provides written notice to the creditor or servicer of such
				choice, at any time after such an account is established in connection with any
				such transaction and in accordance with any statute, regulation, or contractual
				agreement, to close such account,
								the
				creditor or servicer shall provide a timely and clearly written disclosure to
				the consumer that advises the consumer of the responsibilities of the consumer
				and implications for the consumer in the absence of any such account.(2)Disclosure
				requirementsAny disclosure provided to a consumer under
				paragraph (1) shall include the following:
								(A)Information
				concerning any applicable fees or costs associated with either the
				non-establishment of any such account at the time of the transaction, or any
				subsequent closure of any such account.
								(B)A clear and
				prominent notice that the consumer is responsible for personally and directly
				paying the non-escrowed items, in addition to paying the mortgage loan payment,
				in the absence of any such account, and the fact that the costs for taxes,
				insurance, and related fees can be substantial.
								(C)A clear
				explanation of the consequences of any failure to pay non-escrowed items,
				including the possible requirement for the forced placement of insurance by the
				creditor or servicer and the potentially higher cost (including any potential
				commission payments to the servicer) or reduced coverage for the consumer in
				the event of any such creditor-placed insurance.
								(D)Such other information as the Federal
				banking agencies jointly determine necessary for the protection of the
				consumer.
								.
				(b)Implementation
					(1)RegulationsThe Federal banking agencies and the
			 Federal Trade Commission shall prescribe, in final form, such regulations as
			 such agencies determine to be necessary to implement the amendments made by
			 subsection (a) before the end of the 180-day period beginning on the date of
			 the enactment of this Act.
					(2)Effective
			 dateThe amendments made by subsection (a) shall only apply in
			 accordance with the regulations established in paragraph (1) and beginning on
			 the date occurring 180-days after the date of the publication of final
			 regulations in the Federal Register.
					503.Real Estate
			 Settlement Procedures Act of 1974 amendments
				(a)Servicer
			 prohibitionsSection 6 of the Real Estate Settlement Procedures
			 Act of 1974 (12 U.S.C. 2605) is amended by adding at the end the following new
			 subsections:

						(k)Servicer
				prohibitions
							(1)In
				generalA servicer of a federally related mortgage shall
				not—
								(A)obtain
				force-placed hazard insurance unless there is a reasonable basis to believe the
				borrower has failed to comply with the loan contract’s requirements to maintain
				property insurance;
								(B)charge fees for
				responding to valid qualified written requests (as defined in regulations which
				the Secretary shall prescribe) under this section;
								(C)fail to take
				timely action to respond to a borrower’s requests to correct errors relating to
				allocation of payments, final balances for purposes of paying off the loan, or
				avoiding foreclosure, or other standard servicer’s duties;
								(D)fail to respond
				within 10 business days to a request from a borrower to provide the identity,
				address, and other relevant contact information about the owner assignee of the
				loan; or
								(E)fail to comply
				with any other obligation found by the Secretary, by regulation, to be
				appropriate to carry out the consumer protection purposes of this Act.
								(2)Force-placed
				insurance definedFor purposes of this subsection and subsections
				(l) and (m), the term force-placed insurance means hazard
				insurance coverage obtained by a servicer of a federally related mortgage when
				the borrower has failed to maintain or renew hazard insurance on such property
				as required of the borrower under the terms of the mortgage.
							(l)Requirements for
				force-placed insuranceA servicer of a federally related mortgage
				shall not be construed as having a reasonable basis for obtaining force-placed
				insurance unless the requirements of this subsection have been met.
							(1)Written notices
				to borrowerA servicer may not impose any charge on any borrower
				for force-placed insurance with respect to any property securing a federally
				related mortgage unless—
								(A)the servicer has sent, by first-class mail,
				a written notice to the borrower containing—
									(i)a
				reminder of the borrower’s obligation to maintain hazard insurance on the
				property securing the federally related mortgage;
									(ii)a
				statement that the servicer does not have evidence of insurance coverage of
				such property;
									(iii)a clear and
				conspicuous statement of the procedures by which the borrower may demonstrate
				that the borrower already has insurance coverage; and
									(iv)a statement that the servicer may obtain
				such coverage at the borrower’s expense if the borrower does not provide such
				demonstration of the borrower’s existing coverage in a timely manner;
									(B)the servicer has sent, by first-class mail,
				a second written notice, at least 30 days after the mailing of the notice under
				subparagraph (A) that contains all the information described in each clause of
				such subparagraph; and
								(C)the servicer has
				not received from the borrower any demonstration of hazard insurance coverage
				for the property securing the mortgage by the end of the 15-day period
				beginning on the date the notice under subparagraph (B) was sent by the
				servicer.
								(2)Sufficiency of
				demonstrationA servicer of a
				federally related mortgage shall accept any reasonable form of written
				confirmation from a borrower of existing insurance coverage, which shall
				include the existing insurance policy number along with the identity of, and
				contact information for, the insurance company or agent.
							(3)Termination of
				force-placed insuranceWithin
				15 days of the receipt by a servicer of confirmation of a borrower’s existing
				insurance coverage, the servicer shall—
								(A)terminate the
				force-placed insurance; and
								(B)refund to the
				consumer all force-placed insurance premiums paid by the borrower during any
				period during which the borrower’s insurance coverage and the force-placed
				insurance coverage were each in effect, and any related fees charged to the
				consumer’s account with respect to the force-placed insurance during such
				period.
								(4)Clarification
				with respect to Flood Disaster Protection ActNo provision of this section shall be
				construed as prohibiting a servicer from providing simultaneous or concurrent
				notice of a lack of flood insurance pursuant to section 102(e) of the Flood
				Disaster Protection Act of 1973.
							(m)Limitations on
				force-placed insurance chargesAll charges for force-placed
				insurance premiums shall be bona fide and reasonable in
				amount.
						.
				(b)Increase in
			 penalty amountsSection 6(f) of the Real Estate Settlement
			 Procedures Act of 1974 (12 U.S.C. 2605(f)) is amended—
					(1)in paragraphs
			 (1)(B) and (2)(B), by striking $1,000 each place such term
			 appears and inserting $2,000; and
					(2)in paragraph
			 (2)(B)(i), by striking $500,000 and inserting
			 $1,000,000.
					(c)Decrease in
			 response timesSection 6(e) of the Real Estate Settlement
			 Procedures Act of 1974 (12 U.S.C. 2605(e)) is amended—
					(1)in paragraph
			 (1)(A), by striking 20 days and inserting 5
			 days;
					(2)in paragraph (2),
			 by striking 60 days and inserting 30 days;
			 and
					(3)by adding at the
			 end the following new paragraph:

							(4)Limited
				extension of response timeThe 30-day period described in
				paragraph (2) may be extended for not more than 15 days if, before the end of
				such 30-day period, the servicer notifies the borrower of the extension and the
				reasons for the delay in
				responding.
							.
					(d)Prompt refund of
			 escrow accounts upon payoffSection 6(g) of the Real Estate
			 Settlement Procedures Act of 1974 (12 U.S.C. 2605(g)) is amended by adding at
			 the end the following new sentence: Any balance in any such account that
			 is within the servicer’s control at the time the loan is paid off shall be
			 promptly returned to the borrower within 20 business days or credited to a
			 similar account for a new mortgage loan to the borrower with the same
			 lender..
				504.Truth in
			 Lending Act amendments
				(a)Requirements for
			 prompt crediting of home loan paymentsChapter 2 of the Truth in Lending Act (15
			 U.S.C. 1631 et seq.) is amended by inserting after section 129E (as added by
			 section 602) the following new section (and by amending the table of contents
			 accordingly):

						129F.Requirements
				for prompt crediting of home loan payments
							(a)In
				generalIn connection with a
				consumer credit transaction secured by a consumer’s principal dwelling, no
				servicer shall fail to credit a payment to the consumer’s loan account as of
				the date of receipt, except when a delay in crediting does not result in any
				charge to the consumer or in the reporting of negative information to a
				consumer reporting agency, except as required in subsection (b).
							(b)ExceptionIf
				a servicer specifies in writing requirements for the consumer to follow in
				making payments, but accepts a payment that does not conform to the
				requirements, the servicer shall credit the payment as of 5 days after
				receipt.
							.
				(b)Requests for
			 payoff amountsChapter 2 of
			 such Act is further amended by inserting after section 129F (as added by
			 subsection (a)) the following new section (and by amending the table of
			 contents accordingly):

						129G.Requests for
				payoff amounts of home loanA
				creditor or servicer of a home loan shall send an accurate payoff balance
				within a reasonable time, but in no case more than 7 business days, after the
				receipt of a written request for such balance from or on behalf of the
				borrower.
						.
				505.Escrows
			 included in repayment analysisSection 128(b) of the Truth in Lending Act
			 (15 U.S.C. 1638(b)) is amended by adding at the end the following new
			 paragraph:

					(4)Repayment
				analysis required to include escrow payments
						(A)In
				generalIn the case of any
				consumer credit transaction secured by a first mortgage or lien on the
				principal dwelling of the consumer, other than a consumer credit transaction
				under an open end credit plan or a reverse mortgage, for which an impound,
				trust, or other type of account has been or will be established in connection
				with the transaction for the payment of property taxes, hazard and flood (if
				any) insurance premiums, or other periodic payments or premiums with respect to
				the property, the information required to be provided under subsection (a) with
				respect to the number, amount, and due dates or period of payments scheduled to
				repay the total of payments shall take into account the amount of any monthly
				payment to such account for each such repayment in accordance with section
				10(a)(2) of the Real Estate Settlement Procedures Act of 1974.
						(B)Assessment
				valueThe amount taken into account under subparagraph (A) for
				the payment of property taxes, hazard and flood (if any) insurance premiums, or
				other periodic payments or premiums with respect to the property shall reflect
				the taxable assessed value of the real property securing the transaction after
				the consummation of the transaction, including the value of any improvements on
				the property or to be constructed on the property (whether or not such
				construction will be financed from the proceeds of the transaction), if known,
				and the replacement costs of the property for hazard insurance, in the initial
				year after the
				transaction.
						.
			VIAppraisal
			 Activities
			601.Property
			 appraisal requirementsChapter
			 2 of the Truth in Lending Act (15 U.S.C. 1631 et seq.) is amended by inserting
			 after 129G (as added by section 504) the following new section:

					129HProperty
				appraisal requirements
						(a)In
				generalA creditor may not extend credit in the form of a
				subprime mortgage to any consumer without first obtaining a written appraisal
				of the property to be mortgaged prepared in accordance with the requirements of
				this section.
						(b)Appraisal
				requirements
							(1)Physical
				property visitAn appraisal
				of property to be secured by a subprime mortgage does not meet the requirement
				of this section unless it is performed by a qualified appraiser who conducts a
				physical property visit of the interior of the mortgaged property.
							(2)Second appraisal
				under certain circumstances
								(A)In
				generalIf the purpose of a
				subprime mortgage is to finance the purchase or acquisition of the mortgaged
				property from a person within 180 days of the purchase or acquisition of such
				property by that person at a price that was lower than the current sale price
				of the property, the creditor shall obtain a second appraisal from a different
				qualified appraiser. The second appraisal shall include an analysis of the
				difference in sale prices, changes in market conditions, and any improvements
				made to the property between the date of the previous sale and the current
				sale.
								(B)No cost to
				applicantThe cost of any second appraisal required under
				subparagraph (A) may not be charged to the applicant.
								(3)Qualified
				appraiser definedFor purposes of this section, the term
				qualified appraiser means a person who—
								(A)is, at a minimum,
				certified or licensed by the State in which the property to be appraised is
				located; and
								(B)performs each
				appraisal in conformity with the Uniform Standards of Professional Appraisal
				Practice and title XI of the Financial Institutions Reform, Recovery, and
				Enforcement Act of 1989, and the regulations prescribed under such title, as in
				effect on the date of the appraisal.
								(c)Free copy of
				appraisalA creditor shall provide 1 copy of each appraisal
				conducted in accordance with this section in connection with a subprime
				mortgage to the applicant without charge, and at least 3 days prior to the
				transaction closing date.
						(d)Consumer
				notificationAt the time of the initial mortgage application, the
				applicant shall be provided with a statement by the creditor that any appraisal
				prepared for the mortgage is for the sole use of the creditor, and that the
				applicant may choose to have a separate appraisal conducted at their own
				expense.
						(e)ViolationsIn
				addition to any other liability to any person under this title, a creditor
				found to have willfully failed to obtain an appraisal as required in this
				section shall be liable to the applicant or borrower for the sum of
				$2,000.
						(f)Subprime
				mortgage definedFor purposes
				of this section, the term subprime mortgage means a residential
				mortgage loan secured by a principal dwelling with an annual percentage rate
				that exceeds the average prime offer rate for a comparable transaction, as of
				the date the interest rate is set—
							(1)by 1.5 or more percentage points, in the
				case of a first lien residential mortgage loan having an original principal
				obligation amount that does not exceed 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 of 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));
							(2)by 2.5 or more percentage points, in the
				case of a first lien residential mortgage loan having an original principal
				obligation amount that 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 of 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
							(3)by 3.5 or more
				percentage points for a subordinate lien residential mortgage
				loan.
							.
			602.Unfair and
			 deceptive practices and acts relating to certain consumer credit
			 transactions
				(a)In
			 generalChapter 2 of the Truth in Lending Act (15 U.S.C. 1631 et
			 seq.) is amended by inserting after section 129D (as added by section 501(a))
			 the following new section:

						129E.Unfair and
				deceptive practices and acts relating to certain consumer credit
				transactions
							(a)In
				generalIt shall be unlawful,
				in extending credit or in providing any services for a consumer credit
				transaction secured by the principal dwelling of the consumer, to engage in any
				unfair or deceptive act or practice as described in or pursuant to regulations
				prescribed under this section.
							(b)Appraisal
				independenceFor purposes of subsection (a), unfair and deceptive
				practices shall include—
								(1)any appraisal of a
				property offered as security for repayment of the consumer credit transaction
				that is conducted in connection with such transaction in which a person with an
				interest in the underlying transaction compensates, coerces, extorts, colludes,
				instructs, induces, bribes, or intimidates a person conducting or involved in
				an appraisal, or attempts, to compensate, coerce, extort, collude, instruct,
				induce, bribe, or intimidate such a person, for the purpose of causing the
				appraised value assigned, under the appraisal, to the property to be based on
				any factor other than the independent judgment of the appraiser;
								(2)mischaracterizing, or suborning any
				mischaracterization of, the appraised value of the property securing the
				extension of the credit;
								(3)seeking to influence an appraiser or
				otherwise to encourage a targeted value in order to facilitate the making or
				pricing of the transaction; and
								(4)withholding or threatening to withhold
				timely payment for an appraisal report or for appraisal services
				rendered.
								(c)ExceptionsThe
				requirements of subsection (b) shall not be construed as prohibiting a mortgage
				lender, mortgage broker, mortgage banker, real estate broker, appraisal
				management company, employee of an appraisal management company, consumer, or
				any other person with an interest in a real estate transaction from asking an
				appraiser to provide 1 or more of the following services:
								(1)Consider
				additional, appropriate property information, including the consideration of
				additional comparable properties to make or support an appraisal.
								(2)Provide further
				detail, substantiation, or explanation for the appraiser’s value
				conclusion.
								(3)Correct errors in
				the appraisal report.
								(d)Prohibitions on
				conflicts of interestNo
				certified or licensed appraiser conducting, and no appraisal management company
				procuring or facilitating, an appraisal in connection with a consumer credit
				transaction secured by the principal dwelling of a consumer may have a direct
				or indirect interest, financial or otherwise, in the property or transaction
				involving the appraisal.
							(e)Mandatory
				reportingAny mortgage
				lender, mortgage broker, mortgage banker, real estate broker, appraisal
				management company, employee of an appraisal management company, or any other
				person involved in a real estate transaction involving an appraisal in
				connection with a consumer credit transaction secured by the principal dwelling
				of a consumer who has a reasonable basis to believe an appraiser is failing to
				comply with the Uniform Standards of Professional Appraisal Practice, is
				violating applicable laws, or is otherwise engaging in unethical or
				unprofessional conduct, shall refer the matter to the applicable State
				appraiser certifying and licensing agency.
							(f)No extension of
				creditIn connection with a
				consumer credit transaction secured by a consumer’s principal dwelling, a
				creditor who knows, at or before loan consummation, of a violation of the
				appraisal independence standards established in subsections (b) or (d) shall
				not extend credit based on such appraisal unless the creditor documents that
				the creditor has acted with reasonable diligence to determine that the
				appraisal does not materially misstate or misrepresent the value of such
				dwelling.
							(g)Rulemaking
				proceedingsThe Board, the
				Comptroller of the Currency, the Director of the Office of Thrift Supervision,
				the Federal Deposit Insurance Corporation, the National Credit Union
				Administration Board, and the Federal Trade Commission—
								(1)shall, for purposes of this section,
				jointly prescribe regulations no later than 180 days after the date of the
				enactment of this section, and where such regulations have an effective date of
				no later than 1 year after the date of the enactment of this section, defining
				with specificity acts or practices which are unfair or deceptive in the
				provision of mortgage lending services for a consumer credit transaction
				secured by the principal dwelling of the consumer or mortgage brokerage
				services for such a transaction and defining any terms in this section or such
				regulations; and
								(2)may jointly issue interpretive guidelines
				and general statements of policy with respect to unfair or deceptive acts or
				practices in the provision of mortgage lending services for a consumer credit
				transaction secured by the principal dwelling of the consumer and mortgage
				brokerage services for such a transaction, within the meaning of subsections
				(a), (b), (c), (d), (e), and (f).
								(h)Penalties
								(1)First
				violationIn addition to the enforcement provisions referred to
				in section 130, each person who violates this section shall forfeit and pay a
				civil penalty of not more than $10,000 for each day any such violation
				continues.
								(2)Subsequent
				violationsIn the case of any person on whom a civil penalty has
				been imposed under paragraph (1), paragraph (1) shall be applied by
				substituting $20,000 for $10,000 with respect to
				all subsequent violations.
								(3)AssessmentThe
				agency referred to in subsection (a) or (c) of section 108 with respect to any
				person described in paragraph (1) shall assess any penalty under this
				subsection to which such person is
				subject.
								.
				(b)Clerical
			 AmendmentThe table of sections for chapter 2 of the Truth in
			 Lending Act is amended by inserting after the item relating to section 129D (as
			 added by section 501(c)) the following new item:

							129E. Unfair and deceptive practices and
				acts relating to certain consumer credit
				transactions.

						.
				603.Amendments relating
			 to Appraisal Subcommittee of FIEC, Appraiser Independence Monitoring, Approved
			 Appraiser Education, Appraisal Management Companies, Appraiser Complaint
			 Hotline, Automated Valuation Models, and Broker Price Opinions
				(a)Consumer
			 protection mission
					(1)PurposesSection
			 1101 of the Financial Institutions Reform, Recovery, and Enforcement Act of
			 1989 (12 U.S.C. 3331) is amended by inserting and to provide the
			 Appraisal Subcommittee with a consumer protection mandate before the
			 period at the end.
					(2)Functions of
			 appraisal subcommitteeSection 1103(a) of the Financial
			 Institutions Reform, Recovery, and Enforcement Act of 1989 (12 U.S.C. 3332(a))
			 is amended—
						(A)by striking
			 and at the end of paragraph (3); and
						(B)by amending
			 paragraph (4) to read as follows:

								(4)monitor the efforts of, and requirements
				established by, States and the Federal financial institutions regulatory
				agencies to protect consumers from improper appraisal practices and the
				predations of unlicensed appraisers in consumer credit transactions that are
				secured by a consumer’s principal dwelling;
				and
								.
						(3)Threshold
			 levelsSection 1112(b) of the Financial Institutions Reform,
			 Recovery, and Enforcement Act of 1989 (12 U.S.C. 3341(b)) is amended by
			 inserting before the period the following: , and that such threshold
			 level provides reasonable protection for consumers who purchase 1–4 unit
			 single-family residences. In determining whether a threshold level provides
			 reasonable protection for consumers, each Federal financial institutions
			 regulatory agency shall consult with consumer groups and convene a public
			 hearing.
					(b)Annual report of
			 Appraisal SubcommitteeSection 1103(a) of the Financial
			 Institutions Reform, Recovery, and Enforcement Act of 1989 (12 U.S.C. 3332(a))
			 is amended at the end by inserting the following new paragraph:

						(5)transmit an annual report to the Congress
				not later than January 31 of each year that describes the manner in which each
				function assigned to the Appraisal Subcommittee has been carried out during the
				preceding year. The report shall also detail the activities of the Appraisal
				Subcommittee, including the results of all audits of State appraiser regulatory
				agencies, and provide an accounting of disapproved actions and warnings taken
				in the previous year, including a description of the conditions causing the
				disapproval and actions taken to achieve
				compliance.
						.
				(c)Open
			 meetingsSection 1104(b) of the Financial Institutions Reform,
			 Recovery, and Enforcement Act of 1989 (12 U.S.C. 3333(b)) is amended by
			 inserting in public session after notice in the Federal Register
			 after shall meet.
				(d)RegulationsSection
			 1106 of the Financial Institutions Reform, Recovery, and Enforcement Act of
			 1989 (12 U.S.C. 3335) is amended—
					(1)by inserting
			 prescribe regulations after notice and opportunity for comment,
			 after hold hearings; and
					(2)at the end by
			 inserting Any regulations prescribed by the Appraisal Subcommittee shall
			 (unless otherwise provided in this title) be limited to the following
			 functions: temporary practice, national registry, information sharing, and
			 enforcement. For purposes of prescribing regulations, the Appraisal
			 Subcommittee shall establish an advisory committee of industry participants,
			 including appraisers, lenders, consumer advocates, and government agencies, and
			 hold meetings as necessary to support the development of
			 regulations..
					(e)Appraisals and
			 appraisal reviewsSection
			 1113 of the Financial Institutions Reform, Recovery, and Enforcement Act of
			 1989 (12 U.S.C. 3342) is amended—
					(1)by striking
			 In determining and inserting (a) In
			 general.—In determining;
					(2)in subsection (a) (as designated by
			 paragraph (1)), by inserting before the period the following: , where a
			 complex 1-to-4 unit single family residential appraisal means an appraisal for
			 which the property to be appraised, the form of ownership, the property
			 characteristics, or the market conditions are atypical; and
					(3)by adding at the
			 end the following new subsection:

							(b)Appraisals and
				appraisal reviewsAll
				appraisals performed at a property within a State shall be prepared by
				appraisers licensed or certified in the State where the property is located.
				All appraisal reviews, including appraisal reviews by a lender, appraisal
				management company, or other third party organization, shall be performed by an
				appraiser who is duly licensed or certified by a State appraisal
				board.
							.
					(f)Appraisal
			 management services
					(1)Supervision of
			 third party providers of appraisal management servicesSection 1103(a) of the Financial
			 Institutions Reform, Recovery, and Enforcement Act of 1989 (12 U.S.C. 3332(a))
			 (as previously amended by this section) is further amended—
						(A)by amending
			 paragraph (1) to read as follows:

								(1)monitor the requirements established by
				States—
									(A)for the
				certification and licensing of individuals who are qualified to perform
				appraisals in connection with federally related transactions, including a code
				of professional responsibility; and
									(B)for the registration and supervision of the
				operations and activities of an appraisal management
				company;
									;
				and
						(B)by adding at the
			 end the following new paragraph:

								(7)maintain a national registry of appraisal
				management companies that either are registered with and subject to supervision
				of a State appraiser certifying and licensing agency or are operating
				subsidiaries of a Federally regulated financial
				institution.
								.
						(2)Appraisal
			 management company minimum qualificationsTitle XI of the Financial Institutions
			 Reform, Recovery, and Enforcement Act of 1989 (12 U.S.C. 3331 et seq.) is
			 amended by adding at the end the following new section (and amending the table
			 of contents accordingly):

							1124.Appraisal
				management company minimum qualifications
								(a)In
				generalThe Appraiser
				Qualifications Board of the Appraisal Foundation shall establish minimum
				qualifications to be applied by a State in the registration of appraisal
				management companies. Such qualifications shall include a requirement that such
				companies—
									(1)register with and be subject to supervision
				by a State appraiser certifying and licensing agency in each State in which
				such company operates;
									(2)verify that only
				licensed or certified appraisers are used for federally related
				transactions;
									(3)require that
				appraisals coordinated by an appraisal management company comply with the
				Uniform Standards of Professional Appraisal Practice; and
									(4)require that
				appraisals are conducted independently and free from inappropriate influence
				and coercion pursuant to the appraisal independence standards established under
				section 129E of the Truth in Lending Act.
									(b)Exception for
				federally regulated financial institutionsThe requirements of subsection (a) shall
				not apply to an appraisal management company that is a subsidiary owned and
				controlled by a financial institution and regulated by a federal financial
				institution regulatory agency. In such case, the appropriate federal financial
				institutions regulatory agency shall, at a minimum, develop regulations
				affecting the operations of the appraisal management company to—
									(1)verify that only
				licensed or certified appraisers are used for federally related
				transactions;
									(2)require that
				appraisals coordinated by an institution or subsidiary providing appraisal
				management services comply with the Uniform Standards of Professional Appraisal
				Practice; and
									(3)require that
				appraisals are conducted independently and free from inappropriate influence
				and coercion pursuant to the appraisal independence standards established under
				section 129E of the Truth in Lending Act.
									(c)Registration
				limitationsAn appraisal
				management company shall not be registered by a State if such company, in whole
				or in part, directly or indirectly, is owned by any person who has had an
				appraiser license or certificate refused, denied, cancelled, surrendered in
				lieu of revocation, or revoked in any State. Additionally, each person that
				owns more than 10 percent of an appraisal management company shall be of good
				moral character, as determined by the State appraiser certifying and licensing
				agency, and shall submit to a background investigation carried out by the State
				appraiser certifying and licensing agency.
								(d)RegulationsThe Appraisal Subcommittee shall promulgate
				regulations to implement the minimum qualifications developed by the Appraiser
				Qualifications Board under this section, as such qualifications relate to the
				State appraiser certifying and licensing agencies. The Appraisal Subcommittee
				shall also promulgate regulations for the reporting of the activities of
				appraisal management companies in determining the payment of the annual
				registry fee.
								(e)Effective
				date
									(1)In
				generalNo appraisal management company may perform services
				related to a federally related transaction in a State after the date that is 36
				months after the date of the enactment of this section unless such company is
				registered with such State or subject to oversight by a federal financial
				institutions regulatory agency.
									(2)Extension of
				effective dateSubject to the
				approval of the Council, the Appraisal Subcommittee may extend by an additional
				12 months the requirements for the registration and supervision of appraisal
				management companies if it makes a written finding that a State has made
				substantial progress in establishing a State appraisal management company
				registration and supervision system that appears to conform with the provisions
				of this
				title.
									.
					(3)State appraiser
			 certifying and licensing agency authoritySection 1117 of the Financial Institutions
			 Reform, Recovery, and Enforcement Act of 1989 (12 U.S.C. 3346) is amended by
			 adding at the end the following: The duties of such agency may
			 additionally include the registration and supervision of appraisal management
			 companies..
					(4)Appraisal
			 management company definitionSection 1121 of the Financial Institutions
			 Reform, Recovery, and Enforcement Act of 1989 (12 U.S.C. 3350) is amended by
			 adding at the end the following:

							(11)Appraisal
				management companyThe term
				appraisal management company means, in connection with valuing
				properties collateralizing mortgage loans or mortgages incorporated into a
				securitization, any external third party authorized either by a creditor of a
				consumer credit transaction secured by a consumer’s principal dwelling or by an
				underwriter of or other principal in the secondary mortgage markets, that
				oversees a network or panel of more than 15 certified or licensed appraisers in
				a State or 25 or more nationally within a given year—
								(A)to recruit,
				select, and retain appraisers;
								(B)to contract with
				licensed and certified appraisers to perform appraisal assignments;
								(C)to manage the
				process of having an appraisal performed, including providing administrative
				duties such as receiving appraisal orders and appraisal reports, submitting
				completed appraisal reports to creditors and underwriters, collecting fees from
				creditors and underwriters for services provided, and reimbursing appraisers
				for services performed; or
								(D)to review and
				verify the work of
				appraisers.
								.
					(g)State agency
			 reporting requirementSection 1109(a) of the Financial
			 Institutions Reform, Recovery, and Enforcement Act of 1989 (12 U.S.C. 3338(a))
			 is amended—
					(1)by striking and after the
			 semicolon in paragraph (1);
					(2)by redesignating paragraph (2) as paragraph
			 (4); and
					(3)by inserting after paragraph (1) the
			 following new paragraphs:

							(2)transmit reports
				on sanctions, disciplinary actions, license and certification revocations, and
				license and certification suspensions on a timely basis to the national
				registry of the Appraisal Subcommittee;
							(3)transmit reports on a timely basis of
				supervisory activities involving appraisal management companies or other
				third-party providers of appraisals and appraisal management services,
				including investigations initiated and disciplinary actions taken;
				and
							.
					(h)Registry fees
			 modified
					(1)In
			 generalSection 1109(a) of the Financial Institutions Reform,
			 Recovery, and Enforcement Act of 1989 (12 U.S.C. 3338(a)) is amended—
						(A)by amending
			 paragraph (4) (as modified by section 603(g) of this Act) to read as
			 follows:

								(4)collect—
									(A)from such
				individuals who perform or seek to perform appraisals in federally related
				transactions, an annual registry fee of not more than $40, such fees to be
				transmitted by the State agencies to the Council on an annual basis; and
									(B)from an appraisal management company that
				either has registered with a State appraiser certifying and licensing agency in
				accordance with this title or operates as a subsidiary of a federally regulated
				financial institution, an annual registry fee of—
										(i)in
				the case of such a company that has been in existence for more than a year, $25
				multiplied by the number of appraisers working for or contracting with such
				company in such State during the previous year, but where such $25 amount may
				be adjusted, up to a maximum of $50, at the discretion of the Appraisal
				Subcommittee, if necessary to carry out the Subcommittee’s functions under this
				title; and
										(ii)in the case of such a company that has not
				been in existence for more than a year, $25 multiplied by an appropriate number
				to be determined by the Appraisal Subcommittee, and where such number will be
				used for determining the fee of all such companies that were not in existence
				for more than a year, but where such $25 amount may be adjusted, up to a
				maximum of $50, at the discretion of the Appraisal Subcommittee, if necessary
				to carry out the Subcommittee’s functions under this
				title.
										;
				and
						(B)by amending the
			 matter following paragraph (4), as redesignated, to read as follows:

								Subject
				to the approval of the Council, the Appraisal Subcommittee may adjust the
				dollar amount of registry fees under paragraph (4)(A), up to a maximum of $80
				per annum, as necessary to carry out its functions under this title. The
				Appraisal Subcommittee shall consider at least once every 5 years whether to
				adjust the dollar amount of the registry fees to account for inflation. In
				implementing any change in registry fees, the Appraisal Subcommittee shall
				provide flexibility to the States for multi-year certifications and licenses
				already in place, as well as a transition period to implement the changes in
				registry fees. In establishing the amount of the annual registry fee for an
				appraisal management company, the Appraisal Subcommittee shall have the
				discretion to impose a minimum annual registry fee for an appraisal management
				company to protect against the under reporting of the number of appraisers
				working for or contracted by the appraisal management
				company..
						(2)Incremental
			 revenuesIncremental revenues
			 collected pursuant to the increases required by this subsection shall be placed
			 in a separate account at the United States Treasury, entitled the
			 Appraisal Subcommittee Account.
					(i)Grants and
			 reportsSection 1109(b) of the Financial Institutions Reform,
			 Recovery, and Enforcement Act of 1989 (12 U.S.C. 3348(b)) is amended—
					(1)by striking and after the
			 semicolon in paragraph (3);
					(2)by striking the
			 period at the end of paragraph (4) and inserting a semicolon;
					(3)by adding at the
			 end the following new paragraphs:

							(5)to make grants to State appraiser
				certifying and licensing agencies to support the efforts of such agencies to
				comply with this title, including—
								(A)the complaint
				process, complaint investigations, and appraiser enforcement activities of such
				agencies; and
								(B)the submission of
				data on State licensed and certified appraisers and appraisal management
				companies to the National appraisal registry, including information affirming
				that the appraiser or appraisal management company meets the required
				qualification criteria and formal and informal disciplinary actions; and
								(6)to report to all
				State appraiser certifying and licensing agencies when a license or
				certification is surrendered, revoked, or
				suspended.
							.
					Obligations
			 authorized under this subsection may not exceed 75 percent of the fiscal year
			 total of incremental increase in fees collected and deposited in the
			 Appraisal Subcommittee Account pursuant to subsection
			 (h).(j)CriteriaSection
			 1116 of the Financial Institutions Reform, Recovery, and Enforcement Act of
			 1989 (12 U.S.C. 3345) is amended—
					(1)in subsection (c),
			 by inserting whose criteria for the licensing of a real estate appraiser
			 currently meet or exceed the minimum criteria issued by the Appraisal
			 Qualifications Board of The Appraisal Foundation for the licensing of real
			 estate appraisers before the period at the end; and
					(2)by striking subsection (e) and inserting
			 the following new subsection:

							(e)Minimum
				qualification requirementsAny requirements established for
				individuals in the position of Trainee Appraiser and
				Supervisory Appraiser shall meet or exceed the minimum
				qualification requirements of the Appraiser Qualifications Board of The
				Appraisal Foundation. The Appraisal Subcommittee shall have the authority to
				enforce these
				requirements.
							.
					(k)Monitoring of
			 state appraiser certifying and licensing agenciesSection 1118 of
			 the Financial Institutions Reform, Recovery, and Enforcement Act of 1989 (12
			 U.S.C. 3347) is amended—
					(1)by amending subsection (a) to read as
			 follows:

							(a)In
				generalThe Appraisal
				Subcommittee shall monitor each State appraiser certifying and licensing agency
				for the purposes of determining whether such agency—
								(1)has policies,
				practices, funding, staffing, and procedures that are consistent with this
				title;
								(2)processes
				complaints and completes investigations in a reasonable time period;
								(3)appropriately
				disciplines sanctioned appraisers and appraisal management companies;
								(4)maintains an
				effective regulatory program; and
								(5)reports complaints
				and disciplinary actions on a timely basis to the national registries on
				appraisers and appraisal management companies maintained by the Appraisal
				Subcommittee.
								The
				Appraisal Subcommittee shall have the authority to remove a State licensed or
				certified appraiser or a registered appraisal management company from a
				national registry on an interim basis pending State agency action on licensing,
				certification, registration, and disciplinary proceedings. The Appraisal
				Subcommittee and all agencies, instrumentalities, and Federally recognized
				entities under this title shall not recognize appraiser certifications and
				licenses from States whose appraisal policies, practices, funding, staffing, or
				procedures are found to be inconsistent with this title. The Appraisal
				Subcommittee shall have the authority to impose sanctions, as described in this
				section, against a State agency that fails to have an effective appraiser
				regulatory program. In determining whether such a program is effective, the
				Appraisal Subcommittee shall include an analyses of the licensing and
				certification of appraisers, the registration of appraisal management
				companies, the issuance of temporary licenses and certifications for
				appraisers, the receiving and tracking of submitted complaints against
				appraisers and appraisal management companies, the investigation of complaints,
				and enforcement actions against appraisers and appraisal management companies.
				The Appraisal Subcommittee shall have the authority to impose interim actions
				and suspensions against a State agency as an alternative to, or in advance of,
				the derecognition of a State
				agency..
					(2)in subsection
			 (b)(2), by inserting after “authority” the following: “or sufficient
			 funding”.
					(l)ReciprocitySubsection
			 (b) of section 1122 of the Financial Institutions Reform, Recovery, and
			 Enforcement Act of 1989 (12 U.S.C. 3351(b)) is amended to read as
			 follows:

						(b)ReciprocityA
				State appraiser certifying or licensing agency shall issue a reciprocal
				certification or license for an individual from another State when—
							(1)the appraiser
				licensing and certification program of such other State is in compliance with
				the provisions of this title; and
							(2)the appraiser
				holds a valid certification from a State whose requirements for certification
				or licensing meet or exceed the licensure standards established by the State
				where an individual seeks appraisal
				licensure.
							.
				(m)Consideration of
			 professional appraisal designationsSection 1122(d) of the
			 Financial Institutions Reform, Recovery, and Enforcement Act of 1989 (12 U.S.C.
			 3351(d)) is amended by striking shall not exclude and all that
			 follows through the end of the subsection and inserting the following:
			 may include education achieved, experience, sample appraisals, and
			 references from prior clients. Membership in a nationally recognized
			 professional appraisal organization may be a criteria considered, though lack
			 of membership therein shall not be the sole bar against consideration for an
			 assignment under these criteria..
				(n)Appraiser
			 independenceSection 1122 of the Financial Institutions Reform,
			 Recovery, and Enforcement Act of 1989 (12 U.S.C. 3351) is amended by adding at
			 the end the following new subsection:

						(g)Appraiser
				independence monitoringThe
				Appraisal Subcommittee shall monitor each State appraiser certifying and
				licensing agency for the purpose of determining whether such agency’s policies,
				practices, and procedures are consistent with the purposes of maintaining
				appraiser independence and whether such State has adopted and maintains
				effective laws, regulations, and policies aimed at maintaining appraiser
				independence.
						.
				(o)Appraiser
			 educationSection 1122 of the Financial Institutions Reform,
			 Recovery, and Enforcement Act of 1989 (12 U.S.C. 3351) is amended by inserting
			 after subsection (g) (as added by subsection (l) of this section) the following
			 new subsection:

						(h)Approved
				educationThe Appraisal Subcommittee shall encourage the States
				to accept courses approved by the Appraiser Qualification Board’s Course
				Approval
				Program.
						.
				(p)Appraisal
			 complaint hotlineSection
			 1122 of the Financial Institutions Reform, Recovery, and Enforcement Act of
			 1989 (12 U.S.C. 3351), as amended by this section, is further amended by adding
			 at the end the following new subsection:

						(i)Appraisal
				complaint national hotlineIf, 1 year after the date of the enactment
				of this subsection, the Appraisal Subcommittee determines that no national
				hotline exists to receive complaints of non-compliance with appraisal
				independence standards and Uniform Standards of Professional Appraisal
				Practice, including complaints from appraisers, individuals, or other entities
				concerning the improper influencing or attempted improper influencing of
				appraisers or the appraisal process, the Appraisal Subcommittee shall establish
				and operate such a national hotline, which shall include a toll-free telephone
				number and an email address. If the Appraisal Subcommittee operates such a
				national hotline, the Appraisal Subcommittee shall refer complaints for further
				action to appropriate governmental bodies, including a State appraiser
				certifying and licensing agency, a financial institution regulator, or other
				appropriate legal authorities. For complaints referred to State appraiser
				certifying and licensing agencies or to Federal regulators, the Appraisal
				Subcommittee shall have the authority to follow up such complaint referrals in
				order to determine the status of the resolution of the
				complaint.
						.
				(q)Automated
			 valuation modelsTitle XI of
			 the Financial Institutions Reform, Recovery, and Enforcement Act of 1989 (12
			 U.S.C. 3331 et seq.), as amended by this section, is further amended by adding
			 at the end the following new section (and amending the table of contents
			 accordingly):

						1125.Automated
				valuation models used to value certain mortgages
							(a)In
				generalAutomated valuation
				models shall adhere to quality control standards designed to—
								(1)ensure a high level of confidence in the
				estimates produced by automated valuation models;
								(2)protect against
				the manipulation of data;
								(3)seek to avoid
				conflicts of interest; and
								(4)require random
				sample testing and reviews, where such testing and reviews are performed by an
				appraiser who is licensed or certified in the State where the testing and
				reviews take place.
								(b)Adoption of
				regulationsThe Appraisal
				Subcommittee and its member agencies, in consultation with the Appraisal
				Standards Board of the Appraisal Foundation and other interested parties, shall
				promulgate regulations to implement the quality control standards required
				under this section.
							(c)EnforcementCompliance with regulations issued under
				this subsection shall be enforced by—
								(1)with respect to a financial institution, or
				subsidiary owned and controlled by a financial institution and regulated by a
				Federal financial institution regulatory agency, the Federal financial
				institution regulatory agency that acts as the primary Federal supervisor of
				such financial institution or subsidiary; and
								(2)with respect to
				other persons, the Appraisal Subcommittee.
								(d)Automated
				valuation model definedFor
				purposes of this section, the term automated valuation model
				means any computerized model used by mortgage originators and secondary market
				issuers to determine the collateral worth of a mortgage secured by a consumer’s
				principal
				dwelling.
							.
				(r)Broker price
			 opinionsTitle XI of the
			 Financial Institutions Reform, Recovery, and Enforcement Act of 1989 (12 U.S.C.
			 3331 et seq.), as amended by this section, is further amended by adding at the
			 end the following new section (and amending the table of contents
			 accordingly):

						1126.Broker price
				opinions
							(a)General
				prohibitionIn conjunction
				with the purchase of a consumer’s principal dwelling, broker price opinions may
				not be used as the primary basis to determine the value of a piece of property
				for the purpose of a loan origination of a residential mortgage loan secured by
				such piece of property.
							(b)Broker price
				opinion definedFor purposes of this section, the term
				broker price opinion means an estimate prepared by a real estate
				broker, agent, or sales person that details the probable selling price of a
				particular piece of real estate property and provides a varying level of detail
				about the property’s condition, market, and neighborhood, and information on
				comparable sales, but does not include an automated valuation model, as defined
				in section
				1125(c).
							.
				(s)Amendments to
			 appraisal subcommitteeSection 1011 of the Federal Financial
			 Institutions Examination Council Act of 1978 (12 U.S.C. 3310) is
			 amended—
					(1)in the first
			 sentence, by adding before the period the following: and the Federal
			 Housing Finance Agency; and
					(2)by inserting at
			 the end the following: At all times at least one member of the Appraisal
			 Subcommittee shall have demonstrated knowledge and competence through
			 licensure, certification, or professional designation within the appraisal
			 profession..
					(t)Technical
			 corrections
					(1)Section 1119(a)(2)
			 of the Financial Institutions Reform, Recovery, and Enforcement Act of 1989 (12
			 U.S.C. 3348(a)(2)) is amended by striking council, and inserting
			 Council,.
					(2)Section 1121(6) of
			 the Financial Institutions Reform, Recovery, and Enforcement Act of 1989 (12
			 U.S.C. 3350(6)) is amended by striking Corporations, and
			 inserting Corporation,.
					(3)Section 1121(8) of
			 the Financial Institutions Reform, Recovery, and Enforcement Act of 1989 (12
			 U.S.C. 3350(8)) is amended by striking council and inserting
			 Council.
					(4)Section 1122 of
			 the Financial Institutions Reform, Recovery, and Enforcement Act of 1989 (12
			 U.S.C. 3351) is amended—
						(A)in subsection
			 (a)(1) by moving the left margin of subparagraphs (A), (B), and (C) 2 ems to
			 the right; and
						(B)in subsection
			 (c)—
							(i)by
			 striking Federal Financial Institutions Examination Council and
			 inserting Financial Institutions Examination Council; and
							(ii)by
			 striking the council’s functions and inserting the
			 Council’s functions.
							604.Study required
			 on improvements in appraisal process and compliance programs
				(a)StudyThe
			 Comptroller General shall conduct a comprehensive study on possible
			 improvements in the appraisal process generally, and specifically on the
			 consistency in and the effectiveness of, and possible improvements in, State
			 compliance efforts and programs in accordance with title XI of the Financial
			 Institutions Reform, Recovery, and Enforcement Act of 1989. In addition, this
			 study shall examine the existing exemptions to the use of certified appraisers
			 issued by Federal financial institutions regulatory agencies. The study shall
			 also review the threshold level established by Federal regulators for
			 compliance under title XI and whether there is a need to revise them to reflect
			 the addition of consumer protection to the purposes and functions of the
			 Appraisal Subcommittee. The study shall additionally examine the quality of
			 different types of mortgage collateral valuations produced by broker price
			 opinions, automated valuation models, licensed appraisals, and certified
			 appraisals, among others, and the quality of appraisals provided through
			 different distribution channels, including appraisal management companies,
			 independent appraisal operations within a mortgage originator, and
			 fee-for-service appraisals. The study shall also include an analysis and
			 statistical breakdown of enforcement actions taken during the last 10 years
			 against different types of appraisers, including certified, licensed,
			 supervisory, and trainee appraisers. Furthermore, the study shall examine the
			 benefits and costs, as well as the advantages and disadvantages, of
			 establishing a national repository to collect data related to real estate
			 property collateral valuations performed in the United States.
				(b)ReportBefore
			 the end of the 18-month period beginning on the date of the enactment of this
			 Act, the Comptroller General shall submit a report on the study under
			 subsection (a) to the Committee on Financial Services of the House of
			 Representatives and the Committee on Banking, Housing, and Urban Affairs of the
			 Senate, together with such recommendations for administrative or legislative
			 action, at the Federal or State level, as the Comptroller General may determine
			 to be appropriate.
				(c)Additional study
			 requiredThe Comptroller
			 General shall conduct an additional study to determine the effects that the
			 changes to the seller-guide appraisal requirements of Fannie Mae and Freddie
			 Mac contained in the Home Valuation Code of Conduct have on small business,
			 like mortgage brokers and independent appraisers, and consumers, including the
			 effect on the—
					(1)quality and costs
			 of appraisals;
					(2)length of time for
			 obtaining appraisals;
					(3)impact on consumer
			 protection, especially regarding maintaining appraisal independence, abating
			 appraisal inflation, and mitigating acts of appraisal fraud;
					(4)structure of the
			 appraisal industry, especially regarding appraisal management companies,
			 fee-for-service appraisers, and the regulation of appraisal management
			 companies by the states; and
					(5)impact on mortgage
			 brokers and other small business professionals in the financial services
			 industry.
					(d)Additional
			 reportBefore the end of the 6-month period beginning on the date
			 of the enactment of this Act, the Comptroller General shall submit an
			 additional report to the Committee on Financial Services of the House of
			 Representatives and the Committee on Banking, Housing, and Urban Affairs of the
			 Senate containing the findings and conclusions of the Comptroller General with
			 respect to the study conducted pursuant to subsection (c). Such additional
			 report shall take into consideration the Small Business Administration's views
			 on how small businesses are affected by the Home Valuation Code of
			 Conduct.
				605.Equal Credit
			 Opportunity Act amendmentSubsection (e) of section 701 of the Equal
			 Credit Opportunity Act ( U.S.C. 1691) is amended to read as follows:

					(e)Copies furnished
				to applicants
						(1)In
				generalEach creditor shall
				furnish to an applicant a copy of any and all written appraisals and valuations
				developed in connection with the applicant’s application for a loan that is
				secured or would have been secured by a first lien on a dwelling promptly upon
				completion, but in no case later than 3 days prior to the closing of the loan,
				whether the creditor grants or denies the applicant’s request for credit or the
				application is incomplete or withdrawn.
						(2)WaiverThe applicant may waive the 3 day
				requirement provided for in paragraph (1), except where otherwise required in
				law.
						(3)ReimbursementThe
				applicant may be required to pay a reasonable fee to reimburse the creditor for
				the cost of the appraisal, except where otherwise required in law.
						(4)Free
				copyNotwithstanding paragraph (3), the creditor shall provide a
				copy of each written appraisal or valuation at no additional cost to the
				applicant.
						(5)Notification to
				applicantsAt the time of application, the creditor shall notify
				an applicant in writing of the right to receive a copy of each written
				appraisal and valuation under this subsection.
						(6)RegulationsThe
				Board shall prescribe regulations to implement this subsection within 1 year of
				the date of the enactment of this subsection.
						(7)Valuation
				definedFor purposes of this subsection, the term
				valuation shall include any estimate of the value of a dwelling
				developed in connection with a creditor’s decision to provide credit, including
				those values developed pursuant to a policy of a government sponsored
				enterprise or by an automated valuation model, a broker price opinion, or other
				methodology or
				mechanism.
						.
			606.Real Estate
			 Settlement Procedures Act of 1974 amendment relating to certain appraisal
			 feesSection 4 of the Real
			 Estate Settlement Procedures Act of 1974 is amended by adding at the end the
			 following new subsection:

					(c)The standard form described in subsection
				(a) shall include, in the case of an appraisal coordinated by an appraisal
				management company (as such term is defined in section 1121(11) of the
				Financial Institutions Reform, Recovery, and Enforcement Act of 1989 (12 U.S.C.
				3350(11))), a clear disclosure of—
						(1)the fee paid directly to the appraiser by
				such company; and
						(2)the administration
				fee charged by such
				company.
						.
			VIISense of
			 Congress regarding the importance of government sponsored enterprises
			 reform
			701.Sense of Congress
			 regarding the importance of Government-sponsored enterprises reform to enhance
			 the protection, limitation, and regulation of the terms of residential mortgage
			 credit
				(a)FindingsThe Congress finds as follows:
					(1)The
			 Government-sponsored enterprises, Federal National Mortgage Association (Fannie
			 Mae) and the Federal Home Loan Mortgage Corporation (Freddie Mac), were
			 chartered by Congress to ensure a reliable and affordable supply of mortgage
			 funding, but enjoy a dual legal status as privately owned corporations with
			 Government mandated affordable housing goals.
					(2)In 1996, the
			 Department of Housing and Urban Development required that 42 percent of Fannie
			 Mae’s and Freddie Mac’s mortgage financing should go to borrowers with income
			 levels below the median for a given area.
					(3)In 2004, the
			 Department of Housing and Urban Development revised those goals, increasing
			 them to 56 percent of their overall mortgage purchases by 2008, and
			 additionally mandated that 12 percent of all mortgage purchases by Fannie Mae
			 and Freddie Mac be special affordable loans made to borrowers
			 with incomes less than 60 percent of an area’s median income, a target that
			 ultimately increased to 28 percent for 2008.
					(4)To help fulfill
			 those mandated affordable housing goals, in 1995 the Department of Housing and
			 Urban Development authorized Fannie Mae and Freddie Mac to purchase subprime
			 securities that included loans made to low-income borrowers.
					(5)After this
			 authorization to purchase subprime securities, subprime and near-prime loans
			 increased from 9 percent of securitized mortgages in 2001 to 40 percent in
			 2006, while the market share of conventional mortgages dropped from 78.8
			 percent in 2003 to 50.1 percent by 2007 with a corresponding increase in
			 subprime and Alt-A loans from 10.1 percent to 32.7 percent over the same
			 period.
					(6)In 2004 alone,
			 Fannie Mae and Freddie Mac purchased $175,000,000,000 in subprime mortgage
			 securities, which accounted for 44 percent of the market that year, and from
			 2005 through 2007, Fannie Mae and Freddie Mac purchased approximately
			 $1,000,000,000,000 in subprime and Alt-A loans, while Fannie Mae’s acquisitions
			 of mortgages with less than 10 percent down payments almost tripled.
					(7)According to data
			 from the Federal Housing Finance Agency (FHFA) for the fourth quarter of 2008,
			 Fannie Mae and Freddie Mac own or guarantee 75 percent of all newly originated
			 mortgages, and Fannie Mae and Freddie Mac currently own 13.3 percent of
			 outstanding mortgage debt in the United States and have issued mortgage-backed
			 securities for 31.0 percent of the residential debt market, a combined total of
			 44.3 percent of outstanding mortgage debt in the United States.
					(8)On September 7,
			 2008, the FHFA placed Fannie Mae and Freddie Mac into conservatorship, with the
			 Treasury Department subsequently agreeing to purchase at least $200,000,000,000
			 of preferred stock from each enterprise in exchange for warrants for the
			 purchase of 79.9 percent of each enterprise’s common stock.
					(9)The
			 conservatorship for Fannie Mae and Freddie Mac has potentially exposed
			 taxpayers to upwards of $5,300,000,000,000 worth of risk.
					(10)The hybrid
			 public-private status of Fannie Mae and Freddie Mac is untenable and must be
			 resolved to assure that consumers are offered and receive residential mortgage
			 loans on terms that reasonably reflect their ability to repay the loans and
			 that are understandable and not unfair, deceptive, or abusive.
					(b)Sense of the
			 CongressIt is the sense of the Congress that efforts to enhance
			 by the protection, limitation, and regulation of the terms of residential
			 mortgage credit and the practices related to such credit would be incomplete
			 without enactment of meaningful structural reforms of Fannie Mae and Freddie
			 Mac.
				VIIIReports
			801.GAO study
			 report on government efforts to combat mortgage foreclosure rescue scams and
			 loan modification fraud
				(a)StudyThe Comptroller General of the United
			 States shall conduct a study of the current inter-agency efforts of the
			 Secretary of the Treasury, the Secretary of Housing and Urban Development, the
			 Attorney General, and the Federal Trade Commission to crackdown on mortgage
			 foreclosure rescue scams and loan modification fraud in order to advise the
			 Congress to the risks and vulnerabilities of emerging schemes in the loan
			 modification arena.
				(b)Report
					(1)In
			 generalThe Comptroller General shall submit a report to the
			 Congress on the study conducted under subsection (a) containing such
			 recommendations for legislative and administrative actions as the Comptroller
			 General may determine to be appropriate in addition to the recommendations
			 required under paragraph (2).
					(2)Specific
			 topicsThe report made under
			 paragraph (1) shall include—
						(A)an evaluation of
			 the effectiveness of the inter-agency task force current efforts to combat
			 mortgage foreclosure rescue scams and loan modification fraud scams;
						(B)specific
			 recommendations on agency or legislative action that are essential to properly
			 protect homeowners from mortgage foreclosure rescue scams and loan modification
			 fraud scams; and
						(C)the adequacy of
			 financial resources that the Federal Government is allocating to—
							(i)crackdown on loan
			 modification and foreclosure rescue scams; and
							(ii)the
			 education of homeowners about fraudulent scams relating to loan modification
			 and foreclosure rescues.
							IXMultifamily
			 mortgage resolution
			901.Multifamily
			 mortgage resolution program
				(a)EstablishmentSubject
			 to subsection (e), the Secretary of the Treasury, in consultation with the
			 Secretary of Housing and Urban Development, shall develop a program to
			 stabilize multifamily properties which are delinquent, at risk of default or
			 disinvestment, or in foreclosure.
				(b)Focus of
			 programThe program developed under this section shall be used to
			 ensure the protection of current and future tenants of at risk multifamily
			 properties, where feasible, by—
					(1)creating
			 sustainable financing of such properties that is based on—
						(A)the current rental
			 income generated by such properties; and
						(B)the preservation
			 of adequate operating reserves;
						(2)maintaining the
			 level of Federal, State, and city subsidies in effect as of the date of
			 enactment of this Act; and
					(3)facilitating the
			 transfer, when necessary, of such properties to responsible new owners.
					(c)CoordinationThe
			 Secretary of the Treasury shall in carrying out the program developed under
			 this section coordinate with the Secretary of Housing and Urban Development,
			 the Federal Deposit Insurance Corporation, the Board of Governors of the
			 Federal Reserve System, the Federal Housing Finance Agency, and any other
			 Federal Government agency that the Secretary considers appropriate.
				(d)DefinitionFor
			 purposes of this section, the term multifamily properties means
			 a residential structure that consists of 5 or more dwelling units.
				(e)AuthorityThis section shall not limit the ability of
			 the Secretary of the Treasury to use any existing authority to carry out the
			 program under this section.
				XStudy
			 of effect of drywall presence on foreclosures
			1001.Study of
			 effect of drywall presence on foreclosures
				(a)StudyThe Secretary of Housing and Urban
			 Development, in consultation with the Secretary of the Treasury, shall conduct
			 a study of the effect on residential mortgage loan foreclosures of—
					(1)the presence in
			 residential structures subject to such mortgage loans of drywall that was
			 imported from China during the period beginning with 2004 and ending at the end
			 of 2007; and
					(2)the availability
			 of property insurance for residential structures in which such drywall is
			 present.
					(b)ReportNot later than the expiration of the
			 120-day period beginning on the date of the enactment of this Act, the
			 Secretary of Housing and Urban Development shall submit to the Congress a
			 report on the study conducted under subsection (a) containing its findings,
			 conclusions, and recommendations.
				XIFannie Mae
			 guidelines for purchase of condominium and cooperative housing
			 mortgages
			1101.Guidelines for
			 purchase of condominium and cooperative housing mortgagesThe Federal National Mortgage Association
			 and the Federal Home Loan Mortgage Corporation shall take actions as are
			 appropriate to establish and revise fee schedules, occupancy and pre-sale
			 guidelines, and other relevant underwriting standards for the purchase of
			 condominium and cooperative housing, consistent with appropriate levels of
			 credit risk. In setting such fees, guidelines, and standards, each association
			 may consider factors such as the relative health of the local or regional
			 housing market in which such housing is located, and whether the housing is in
			 a new or existing development.

			Passed the House of
			 Representatives May 7, 2009.
			Lorraine C. Miller,
			Clerk.