  title xiv mortgage reform and anti-predatory lending act  sec 1400 short title designation as enumerated consumer law  a short title this title may be cited as the mortgage reform and anti-predatory lending act   b designation as enumerated consumer law under the purview of the bureau of consumer financial protection subtitles a, b, c, and e and sections 1471, 1472, 1475, and 1476, and the amendments made by such subtitles and sections, shall be enumerated consumer laws, as defined in section 1002, and come under the purview of the bureau of consumer financial protection for purposes of title x, including the transfer of functions and personnel under subtitle f of title x and the savings provisions of such subtitle   c regulations effective date  1 regulations the regulations required to be prescribed under this title or the amendments made by this title shall  a be prescribed in final form before the end of the 18-month period beginning on the designated transfer date and   b take effect not later than 12 months after the date of issuance of the regulations in final form    2 effective date established by rule except as provided in paragraph 3 , a section, or provision thereof, of this title shall take effect on the date on which the final regulations implementing such section, or provision, take effect   3 effective date a section of this title for which regulations have not been issued on the date that is 18 months after the designated transfer date shall take effect on such date     subtitle a residential mortgage loan origination standards  sec 1401 definitions  section 103 of the truth in lending act 15 usc 1602 is amended by adding at the end the following new subsection  cc definitions relating to mortgage origination and residential mortgage loans  1 commission unless otherwise specified, the term commission means the federal trade commission   2 mortgage originator the 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 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 3 properties in any 12-month period to purchasers of such properties, each of which is owned by such person, estate, or trust and serves as security for the loan, provided that such loan  i is not made by a person, estate, or trust that has constructed, or acted as a contractor for the construction of, a residence on the property in the ordinary course of business of such person, estate, or trust   ii is fully amortizing   iii 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   iv 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   v meets any other criteria the board may prescribe    f does not include the creditor except the creditor in a table-funded transaction under paragraph 1 , 2 , or 4 of section 129b c and   g 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    3 nationwide mortgage licensing system and registry the term nationwide mortgage licensing system and registry has the same meaning as in the secure and fair enforcement for mortgage licensing act of 2008   4 other definitions relating to mortgage originator for 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   5 residential mortgage loan the 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, for purposes of sections 129b and 129c and section 128 a 16 , 17 , 18 , and 19 , and sections 128 f and 130 k , and any regulations promulgated thereunder, an extension of credit relating to a plan described in section 101 53d of title 11, united states code   6 secretary the 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   7 servicer the term servicer has the same meaning as in section 6 i 2 of the real estate settlement procedures act of 1974 12 usc 2605 i 2       sec 1402 residential mortgage loan origination  a in general chapter 2 of the truth in lending act 15 usc 1631 et seq is amended  1 by redesignating the 2nd of the 2 sections designated as section 129 15 usc 1639a relating to duty of servicers of residential mortgages as section 129a and   2 by inserting after section 129a as so redesignated the following new section  sec 129b residential mortgage loan origination  a finding and purpose  1 finding the 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 purpose it 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 standard subject 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 and   b include on all loan documents any unique identifier of the mortgage originator provided by the nationwide mortgage licensing system and registry    2 compliance procedures required the board 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 amendment the table of sections for chapter 2 of the truth in lending act is amended by inserting after the item relating to section 129 the following new items     sec 1403 prohibition on steering incentives  section 129b of the truth in lending act as added by section 1402 a is amended by inserting after subsection b the following new subsection  c prohibition on steering incentives  1 in general for any residential mortgage loan, no mortgage originator shall receive from any person and no person shall pay to a mortgage originator, directly or indirectly, compensation that varies based on the terms of the loan other than the amount of the principal   2 restructuring of financing origination fee  a in general for any mortgage loan, a mortgage originator may not receive from any person other than the consumer and no person, other than the consumer, who knows or has reason to know that a consumer has directly compensated or will directly compensate a mortgage originator may pay a mortgage originator any origination fee or charge except bona fide third party charges not retained by the creditor, mortgage originator, or an affiliate of the creditor or mortgage originator   b exception notwithstanding subparagraph a , a mortgage originator may receive from a person other than the consumer an origination fee or charge, and a person other than the consumer may pay a mortgage originator an origination fee or charge, if  i the mortgage originator does not receive any compensation directly from the consumer and   ii the consumer does not make an upfront payment of discount points, origination points, or fees, however denominated other than bona fide third party charges not retained by the mortgage originator, creditor, or an affiliate of the creditor or originator , except that the board may, by rule, waive or provide exemptions to this clause if the board determines that such waiver or exemption is in the interest of consumers and in the public interest     3 regulations the board shall 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 or   ii 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 b 2 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 and   d 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 residential mortgage loan secured by a consumers principal dwelling from another mortgage originator     4 rules of construction no provision of this subsection shall be construed as  a permitting any yield spread premium or other similar compensation that would, for any residential mortgage loan, permit the total amount of direct and indirect compensation from all sources permitted to a mortgage originator to vary based on the terms of the loan other than the amount of the principal   b limiting or affecting the amount of compensation received by a creditor upon the sale of a consummated loan to a subsequent purchaser   c restricting a consumers ability to finance, at the option of the consumer, including through principal or rate, any origination fees or costs permitted under this subsection, or the mortgage originators right to receive such fees or costs including compensation from any person, subject to paragraph 2 b , so long as such fees or costs do not vary based on the terms of the loan other than the amount of the principal or the consumers decision about whether to finance such fees or costs or   d prohibiting incentive payments to a mortgage originator based on the number of residential mortgage loans originated within a specified period of time        sec 1404 liability  section 129b of the truth in lending act is amended by inserting after subsection c as added by section 1403 the following new subsection  d liability for violations  1 in general for purposes of providing a cause of action for any failure by a mortgage originator, other than a creditor, to comply with any requirement imposed under this section and any regulation prescribed under this section, 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 maximum the 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 attorneys fee       sec 1405 regulations  a discretionary regulatory authority section 129b of the truth in lending act is amended by inserting after subsection d as added by section 1404 the following new subsection  e discretionary regulatory authority  1 in general the board shall, by regulations, prohibit or condition terms, acts or practices relating to residential mortgage loans that the board finds to be abusive, unfair, deceptive, predatory, 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 129c, 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 application the 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 disclosures notwithstanding any other provision of this title, in order to improve consumer awareness and understanding of transactions involving residential mortgage loans through the use of disclosures, the board may, by rule, exempt from or modify disclosure requirements, in whole or in part, for any class of residential mortgage loans if the board determines that such exemption or modification is in the interest of consumers and in the public interest    sec 1406 study of shared appreciation mortgages  a study the 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 report not 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     subtitle b minimum standards for mortgages  sec 1411 ability to repay  a in general  1 rule of construction no regulation, order, or guidance issued by the bureau under this title shall be construed as requiring a depository institution to apply mortgage underwriting standards that do not meet the minimum underwriting standards required by the appropriate prudential regulator of the depository institution   2 amendment to truth in lending act chapter 2 of the truth in lending act 15 usc 1631 et seq is amended by inserting after section 129b as added by section 1402 a the following new section  sec 129c minimum standards for residential mortgage loans  a ability to repay  1 in general in accordance with regulations prescribed by the board, 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 including mortgage guarantee insurance , and assessments   2 multiple loans if 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 including mortgage guarantee insurance , and assessments   3 basis for determination a determination under this subsection of a consumers ability to repay a residential mortgage loan shall include consideration of the consumers credit history, current income, expected income the consumer is reasonably assured of receiving, current obligations, debt-to-income ratio or the residual income the consumer will have after paying non-mortgage debt and mortgage-related obligations, employment status, and other financial resources other than the consumers equity in the dwelling or real property that secures repayment of the loan a creditor shall determine the ability of the consumer to repay using a payment schedule that fully amortizes the loan over the term of the loan   4 income verification a creditor making a residential mortgage loan shall verify amounts of income or assets that such creditor relies on to determine repayment ability, including expected income or assets, by reviewing the consumers internal revenue service form w2, tax returns, payroll receipts, financial institution records, or other third-party documents that provide reasonably reliable evidence of the consumers income or assets in 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 or   b a method that quickly and effectively verifies income documentation by a third party subject to rules prescribed by the board    5 exemption with respect to loans made, guaranteed, or insured by federal departments or agencies identified in subsection b 3 b ii , such departments or agencies may exempt refinancings under a streamlined refinancing from this income verification requirement as long as the following conditions are met  a the consumer is not 30 days or more past due on the prior existing residential mortgage loan   b the refinancing does not increase the principal balance outstanding on the prior existing residential mortgage loan, except to the extent of fees and charges allowed by the department or agency making, guaranteeing, or insuring the refinancing   c total points and fees as defined in section 103 aa 4 , other than bona fide third party charges not retained by the mortgage originator, creditor, or an affiliate of the creditor or mortgage originator payable in connection with the refinancing do not exceed 3 percent of the total new loan amount   d the interest rate on the refinanced loan is lower than the interest rate of the original loan, unless the borrower is refinancing from an adjustable rate to a fixed-rate loan, under guidelines that the department or agency shall establish for loans they make, guarantee, or issue   e the refinancing is subject to a payment schedule that will fully amortize the refinancing in accordance with the regulations prescribed by the department or agency making, guaranteeing, or insuring the refinancing   f the terms of the refinancing do not result in a balloon payment, as defined in subsection b 2 a ii   g both the residential mortgage loan being refinanced and the refinancing satisfy all requirements of the department or agency making, guaranteeing, or insuring the refinancing    6 nonstandard loans  a variable rate loans that defer repayment of any principal or interest for purposes of determining, under this subsection, a consumers 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 loans for purposes of determining, under this subsection, a consumers 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 amortization in 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 process for 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 board, 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 15 or more percentage points for a first lien residential mortgage loan and by 35 or more percentage points for a subordinate lien residential mortgage loan or ii using the contracts 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 15 percentage points above the average prime offer rate for a first lien residential mortgage loan and 35 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 lender in 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 there 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 mortgagors 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     7 fully-indexed rate defined for 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   8 reverse mortgages and bridge loans this subsection shall not apply with respect to any reverse mortgage or temporary or bridge loan with a term of 12 months or less, including to any loan to purchase a new dwelling where the consumer plans to sell a different dwelling within 12 months   9 seasonal income if documented income, including income from a small business, is a repayment source for a residential mortgage loan, a creditor may consider the seasonality and irregularity of such income in the underwriting of and scheduling of payments for such credit        b clerical amendment the table of sections for chapter 2 of the truth in lending act is amended by inserting after the item relating to section 129b as added by section 1402 b the following new item     sec 1412 safe harbor and rebuttable presumption  section 129c of the truth in lending act is amended by inserting after subsection a as added by section 1411 the following new subsection  b presumption of ability to repay  1 in general any creditor with respect to any residential mortgage loan, and any assignee of such loan subject to liability under this title, may presume that the loan has met the requirements of subsection a , if the loan is a qualified mortgage   2 definitions for purposes of this subsection, the following definitions shall apply  a qualified mortgage the term qualified mortgage means any residential mortgage loan  i for which the regular periodic payments for the loan may not  i result in an increase of the principal balance or   ii except as provided in subparagraph e , allow the consumer to defer repayment of principal    ii except as provided in subparagraph e , the terms of which do 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   iii for which the income and financial resources relied upon to qualify the obligors on the loan are verified and documented   iv 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   v 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 5 years, and a payment schedule that fully amortizes the loan over the loan term and takes into account all applicable taxes, insurance, and assessments   vi that complies with any guidelines or regulations established by the board relating to ratios of total monthly debt to monthly income or alternative measures of ability to pay regular expenses after payment of total monthly debt, taking into account the income levels of the borrower and such other factors as the board may determine relevant and consistent with the purposes described in paragraph 3 b i   vii for which the total points and fees as defined in subparagraph c payable in connection with the loan do not exceed 3 percent of the total loan amount   viii for which the term of the loan does not exceed 30 years, except as such term may be extended under paragraph 3 , such as in high-cost areas and   ix in the case of a reverse mortgage except for the purposes of subsection a of section 129c, to the extent that such mortgages are exempt altogether from those requirements , a reverse mortgage which meets the standards for a qualified mortgage, as set by the board in rules that are consistent with the purposes of this subsection    b average prime offer rate the term average prime offer rate means the average prime offer rate for a comparable transaction as of the date on which the interest rate for the transaction is set, as published by the board   c points and fees  i in general for purposes of subparagraph a , the term points and fees means points and fees as defined by section 103 aa 4 other than bona fide third party charges not retained by the mortgage originator, creditor, or an affiliate of the creditor or mortgage originator   ii computation for purposes of computing the total points and fees under this subparagraph, the total points and fees shall exclude either of the amounts described in the following subclauses, but not both  i 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 mortgages interest rate will be discounted does not exceed by more than 1 percentage point the average prime offer rate   ii unless 2 bona fide discount points have been excluded under subclause i , 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 mortgages interest rate will be discounted does not exceed by more than 2 percentage points the average prime offer rate    iii bona fide discount points defined for purposes of clause ii , 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   iv interest rate reduction subclauses i and ii of clause ii 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    d smaller loans the board shall prescribe rules adjusting the criteria under subparagraph a vii in order to permit lenders that extend smaller loans to meet the requirements of the presumption of compliance under paragraph 1 in prescribing such rules, the board shall consider the potential impact of such rules on rural areas and other areas where home values are lower   e balloon loans the board may, by regulation, provide that the term qualified mortgage includes a balloon loan  i that meets all of the criteria for a qualified mortgage under subparagraph a except clauses i ii , ii , iv , and v of such subparagraph   ii for which the creditor makes a determination that the consumer is able to make all scheduled payments, except the balloon payment, out of income or assets other than the collateral   iii for which the underwriting is based on a payment schedule that fully amortizes the loan over a period of not more than 30 years and takes into account all applicable taxes, insurance, and assessments and   iv that is extended by a creditor that  i operates predominantly in rural or underserved areas   ii together with all affiliates, has total annual residential mortgage loan originations that do not exceed a limit set by the board   iii retains the balloon loans in portfolio and   iv meets any asset size threshold and any other criteria as the board may establish, consistent with the purposes of this subtitle      3 regulations  a in general the board shall prescribe regulations to carry out the purposes of this subsection   b revision of safe harbor criteria  i in general the board may 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 definition the following agencies shall, in consultation with the board, prescribe rules defining the types of loans they insure, guarantee, or administer, as the case may be, that are qualified mortgages for purposes of paragraph 2 a , and such rules may revise, add to, or subtract from the criteria used to define a qualified mortgage under paragraph 2 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 the national housing act 12 usc 1707 et seq   ii the department of veterans affairs, with regard to a loan made or guaranteed by the secretary of veterans affairs   iii the department of agriculture, with regard loans guaranteed by the secretary of agriculture pursuant to 42 usc 1472 h   iv the rural housing service, with regard to loans insured by the rural housing service          sec 1413 defense to foreclosure  section 130 of the truth in lending act 15 usc 1640 is amended by adding at the end the following new subsection  k defense to foreclosure  1 in general notwithstanding any other provision of law, when a creditor, assignee, or other holder of a residential mortgage loan or anyone acting on behalf of such creditor, assignee, or holder, initiates a judicial or nonjudicial foreclosure of the residential mortgage loan, or any other action to collect the debt in connection with such loan, a consumer may assert a violation by a creditor of paragraph 1 or 2 of section 129b c , or of section 129c a , as a matter of defense by recoupment or set off without regard for the time limit on a private action for damages under subsection e   2 amount of recoupment or setoff  a in general the amount of recoupment or set-off under paragraph 1 shall equal the amount to which the consumer would be entitled under subsection a for damages for a valid claim brought in an original action against the creditor, plus the costs to the consumer of the action, including a reasonable attorneys fee   b special rule where such judgment is rendered after the expiration of the applicable time limit on a private action for damages under subsection e , the amount of recoupment or set-off under paragraph 1 derived from damages under subsection a 4 shall not exceed the amount to which the consumer would have been entitled under subsection a 4 for damages computed up to the day preceding the expiration of the applicable time limit        sec 1414 additional standards and requirements  a in general section 129c of the truth in lending act is amended by inserting after subsection b as added by this title the following new subsections  c prohibition on certain prepayment penalties  1 prohibited on certain loans  a in general a residential mortgage loan that is not a qualified mortgage , as defined under subsection b 2 , 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   b exclusions for purposes of this subsection, a qualified mortgage may not include a residential mortgage loan that  i has an adjustable rate or   ii has an annual percentage rate that exceeds the average prime offer rate for a comparable transaction, as of the date the interest rate is set  i by 15 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 6th sentence of section 305 a 2 the federal home loan mortgage corporation act 12 usc 1454 a 2   ii by 25 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 6th sentence of section 305 a 2 the federal home loan mortgage corporation act 12 usc 1454 a 2 and   iii by 35 or more percentage points, in the case of a subordinate lien residential mortgage loan      2 publication of average prime offer rate and apr thresholds the 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 established under subclause i , ii , and iii of paragraph 1 b ii as necessary to reflect significant changes in market conditions and to effectuate the purposes of the mortgage reform and anti-predatory lending act    3 phased-out penalties on qualified mortgages a qualified mortgage as defined in subsection b 2 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    4 option for no prepayment penalty required a 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    d single premium credit insurance prohibited no 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, 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    e arbitration  1 in general no residential mortgage loan and no extension of credit under an open end consumer credit plan secured by the principal dwelling of the consumer 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 agreements subject to paragraph 3 , paragraph 1 shall not be construed as limiting the right of the consumer and the creditor or any assignee 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 action no 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, 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    f mortgages with negative amortization no 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 board shall prescribe   c negative amortization increases the outstanding principal balance of the account and   d negative amortization reduces the consumers 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 enforcement section 108 a of the truth in lending act 15 usc 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 protection section 129c of the truth in lending act is amended by inserting after subsection f as added by subsection a the following new subsection  g protection against loss of anti-deficiency protection  1 definition for 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 consummation in 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 protection in 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 payment section 129c of the truth in lending act is amended by inserting after subsection g as added by subsection c the following new subsection  h policy regarding acceptance of partial payment in 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 creditors 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    i timeshare plans this section and any regulations promulgated under this section do not apply to an extension of credit relating to a plan described in section 101 53d of title 11, united states code      sec 1415 rule of construction  except as otherwise expressly provided in section 129b or 129c of the truth in lending act as added by this title , 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    sec 1416 amendments to civil liability provisions  a increase in amount of civil money penalties for certain violations section 130 a of the truth in lending act 15 usc 1640 a is amended  1 in paragraph 2 a ii  a by striking $100 and inserting $200 and   b by striking $1,000 and inserting $2,000    2 in paragraph 2 b , by striking $500,000 and inserting $1,000,000 and   3 in paragraph 4 , by inserting , paragraph 1 or 2 of section 129b c , or section 129c a after section 129    b statute of limitations extended for section 129 violations section 130 e of the truth in lending act 15 usc 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, 129b, or 129c 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     sec 1417 lender rights in the context of borrower deception  section 130 of the truth in lending act 15 usc 1640 is amended by adding after subsection k as added by this title the following new subsection  l exemption from liability and rescission in case of borrower fraud or deception in addition to any other remedy available by law or contract, no creditor or assignee shall be liable to an obligor under this section, if such obligor, or co-obligor has been convicted of obtaining by actual fraud such residential mortgage loan      sec 1418 six-month notice required before reset of hybrid adjustable rate mortgages  a in general chapter 2 of the truth in lending act 15 usc 1631 et seq is amended by inserting after section 128 the following new section  sec 128a reset of hybrid adjustable rate mortgages  a hybrid adjustable rate mortgages defined for 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 alternatives during 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    c savings clause the board may require the notice in paragraph b or other notice consistent with this act for adjustable rate mortgage loans that are not hybrid adjustable rate mortgage loans      b clerical amendment the table of sections for chapter 2 of the truth in lending act is amended by inserting after the item relating to section 128 the following new item     sec 1419 required disclosures  section 128 a of truth in lending act 15 usc 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      sec 1420 disclosures required in monthly statements for residential mortgage loans  section 128 of the truth in lending act 15 usc 1638 is amended by adding at the end the following new subsection  f periodic statements for residential mortgage loans  1 in general the 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 form the board shall 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   3 exception paragraph 1 shall not apply to any fixed rate residential mortgage loan where the creditor, assignee, or servicer provides the obligor with a coupon book that provides the obligor with substantially the same information as required in paragraph 1       sec 1421 report by the gao  a report required the comptroller general of the united states 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 subtitle   2 on the ability of prospective homebuyers to obtain financing   3 on the ability of homeowners facing resets or adjustments to refinancefor 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 investors 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 report before 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 provisions the 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 b 3 of the truth in lending act and a recommendation on whether a uniform standard is needed   d analysis of credit risk retention provisions the 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     sec 1422 state attorney general enforcement authority  section 130 e of the truth in lending act 15 usc 1640 e is amended by striking section 129 may also and inserting section 129, 129b, 129c, 129d, 129e, 129f, 129g, or 129h of this act may also     subtitle c high-cost mortgages  sec 1431 definitions relating to high-cost mortgages  a high-cost mortgage defined section 103 aa of the truth in lending act 15 usc 1602 aa is amended by striking all that precedes paragraph 2 and inserting the following  aa high-cost mortgage  1 definition  a in general the 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 consumers principal dwelling, the annual percentage rate at consummation of the transaction will exceed by more than 65 percentage points 85 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 b 2 b , for a comparable transaction or   ii by a subordinate or junior mortgage on the consumers principal dwelling, the annual percentage rate at consummation of the transaction will exceed by more than 85 percentage points the average prime offer rate, as defined in section 129c b 2 b , for a comparable transaction    ii the total points and fees payable in connection with the transaction, other than bona fide third party charges not retained by the mortgage originator, creditor, or an affiliate of the creditor or mortgage originator, 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 account for 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 loan 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 loan    c mortgage insurance for the purposes of computing the total points and fees under paragraph 4 , the total points and fees shall exclude  i any premium provided by an agency of the federal government or an agency of a state   ii any amount that is not in excess of the amount payable under policies in effect at the time of origination under section 203 c 2 a of the national housing act 12 usc 1709 c 2 a , provided that the premium, charge, or fee is required to be refundable on a pro-rated basis and the refund is automatically issued upon notification of the satisfaction of the underlying mortgage loan and   iii any premium paid by the consumer after closing        b adjustment of percentage points section 103 aa 2 of the truth in lending act 15 usc 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 general section 103 aa 4 of the truth in lending act 15 usc 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 is also the creditor in a table-funded transaction     b by redesignating subparagraph d as subparagraph g and   c 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 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 plans section 103 aa of the truth in lending act 15 usc 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 plans in 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 points section 103 of the truth in lending act 15 usc 1602 is amended by inserting after subsection cc as added by section 1401 the following new subsection  dd bona fide discount points and prepayment penalties for 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 average prime offer rate, as defined in section 129c 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 usc 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 average prime offer rate, as defined in section 129c 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 usc 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       sec 1432 amendments to existing requirements for certain mortgages  a prepayment penalty provisions section 129 c 2 of the truth in lending act 15 usc 1639 c 2 is hereby repealed   b no balloon payments section 129 e of the truth in lending act 15 usc 1639 e is amended to read as follows  e no balloon payments no 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      sec 1433 additional requirements for certain mortgages  a additional requirements for certain mortgages section 129 of the truth in lending act 15 usc 1639 is amended  1 by redesignating subsections j , k , l and m as subsections n , o , p , and q respectively and   2 by inserting after subsection i the following new subsections  j recommended default no 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 general no 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 fees if a payment is otherwise a full payment for the applicable period and is paid on its due date or within an applicable grace period, and the only delinquency or insufficiency of payment is attributable to any late fee or delinquency charge assessed on any earlier payment, no late fee or delinquency charge may be imposed on such payment   3 failure to make installment payment if, 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 debt no 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 fees no 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 evasions section 129 of the truth in lending act 15 usc 1639 is amended by inserting after subsection q as so redesignated by subsection a 1 the following new subsection  r prohibitions on evasions, structuring of transactions, and reciprocal arrangements a 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 fees section 129 of the truth in lending act 15 usc 1639 is amended by inserting after subsection r as added by subsection b of this section the following new subsection  s modification and deferral fees prohibited a creditor, successor in interest, assignee, or any agent of any of the above, 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     d payoff statement section 129 of the truth in lending act 15 usc 1639 is amended by inserting after subsection s as added by subsection c of this section the following new subsection  t payoff statement  1 fees  a in general except 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 fee when 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 disclosure prior 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 requests if 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 delivery payoff 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      e pre-loan counseling required section 129 of the truth in lending act 15 usc 1639 is amended by inserting after subsection t as added by subsection d of this section the following new subsection  u pre-loan counseling  1 in general a 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 counseling no 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 regulations the board may prescribe such regulations as the board determines to be appropriate to carry out the requirements of paragraph 1      f corrections and unintentional violations section 129 of the truth in lending act 15 usc 1639 is amended by inserting after subsection u as added by subsection e the following new subsection  v corrections and unintentional violations a creditor or assignee in a high-cost mortgage 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 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         subtitle d office of housing counseling  sec 1441 short title  this subtitle may be cited as the expand and preserve home ownership through counseling act    sec 1442 establishment of office of housing counseling  section 4 of the department of housing and urban development act 42 usc 3533 is amended by adding at the end the following new subsection  g office of housing counseling  1 establishment there is established, in the department, the office of housing counseling   2 director there 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 general the 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 functions the 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 usc 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 distribution of home buying information booklets pursuant to section 5 of the real estate settlement procedures act of 1974 12 usc 2604   iv carrying out the certification program under section 106 e of the housing and urban development act of 1968 12 usc 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 general the secretary shall appoint an advisory committee to provide advice regarding the carrying out of the functions of the director   b members such 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 terms except 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 appointees as 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 expenses members 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 only the advisory committee shall have no role in reviewing or awarding housing counseling grants    5 scope of homeownership counseling in 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       sec 1443 counseling procedures  a in general section 106 of the housing and urban development act of 1968 12 usc 1701x is amended by adding at the end the following new subsection  g procedures and activities  1 counseling procedures  a in general the 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 counseling for purposes of this subsection and as used in the provisions referred to in this subparagraph, the term homeownership counseling means counseling related to homeownership and 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 usc 5305 a 20   ii in the united states housing act of 1937  i section 9 e 42 usc 1437g e   ii section 8 y 1 d 42 usc 1437f y 1 d   iii section 18 a 4 d 42 usc 1437p a 4 d   iv section 23 c 4 42 usc 1437u c 4   v section 32 e 4 42 usc 1437z4 e 4   vi section 33 d 2 b 42 usc 1437z5 d 2 b   vii sections 302 b 6 and 303 b 7 42 usc 1437aaa1 b 6 , 1437aaa2 b 7 and   viii section 304 c 4 42 usc 1437aaa3 c 4    iii section 302 a 4 of the american homeownership and economic opportunity act of 2000 42 usc 1437f note   iv sections 233 b 2 and 258 b of the cranston-gonzalez national affordable housing act 42 usc 12773 b 2 , 12808 b   v this section and section 101 e of the housing and urban development act of 1968 12 usc 1701x, 1701w e   vi section 220 d 2 g of the low-income housing preservation and resident homeownership act of 1990 12 usc 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 usc 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 usc 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 usc 4132 3 , 4229 b 2 a   x in the national housing act  i in section 203 12 usc 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 usc 1715z2 and   iii subsections d 2 b and m 1 of section 255 12 usc 1715z20    xi section 502 h 4 b of the housing act of 1949 42 usc 1472 h 4 b   xii section 508 of the housing and urban development act of 1970 12 usc 1701z7 and   xiii section 106 of the energy policy act of 1992 42 usc 12712 note    c rental housing counseling for 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 usc 5305 a 20   ii in the united states housing act of 1937  i section 9 e 42 usc 1437g e   ii section 18 a 4 d 42 usc 1437p a 4 d   iii section 23 c 4 42 usc 1437u c 4   iv section 32 e 4 42 usc 1437z4 e 4   v section 33 d 2 b 42 usc 1437z5 d 2 b and   vi section 302 b 6 42 usc 1437aaa1 b 6    iii section 233 b 2 of the cranston-gonzalez national affordable housing act 42 usc 12773 b 2   iv section 106 of the housing and urban development act of 1968 12 usc 1701x   v section 422 b 6 of the cranston-gonzalez national affordable housing act 42 usc 12872 b 6   vi section 491 b 1 f iii of the mckinney-vento homeless assistance act 42 usc 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 usc 4132 3 , 4229 b 2 a and   viii the rental assistance program under section 8 of the united states housing act of 1937 42 usc 1437f     2 standards for materials the 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 certification the 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 consumers 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 secretarys specifications   b use and initial availability such 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 availability after 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 compliance this 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 general the 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 information each 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 appropriations there 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 general ten 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 emphasis in 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 defined for purposes of this subparagraph  i high density of foreclosures an 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 communities an 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 communities an 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 programs the 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 organizations section 106 c 5 a ii of the housing and urban development act of 1968 12 usc 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       sec 1444 grants for housing counseling assistance  section 106 a of the housing and urban development act of 1968 12 usc 1701x a is amended by adding at the end the following new paragraph  4 homeownership and rental counseling assistance  a in general the secretary shall make financial assistance available under this paragraph to hud-approved housing counseling agencies and state housing finance agencies   b qualified entities the 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 distribution assistance 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 general none 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 individuals in 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 process in 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 appropriations there 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        sec 1445 requirements to use hud-certified counselors under hud programs  section 106 e of the housing and urban development act of 1968 12 usc 1701x e is amended  1 by striking paragraph 1 and inserting the following new paragraph  1 requirement for assistance an 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 programs any 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 outreach the 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       sec 1446 study of defaults and foreclosures  the 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    sec 1447 default and foreclosure database  a establishment the secretary of housing and urban development and the director of the bureau, 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, subject to subsection e   b census tract data information in the database may be collected, aggregated, and made available on a census tract basis   c requirements information 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 of housing and urban development and the director of the bureau consider appropriate    d rule of construction nothing in this section shall be construed to encourage discriminatory or unsound allocation of credit or lending policies or practices   e privacy and confidentiality in establishing and maintaining the database described in subsection a , the secretary of housing and urban development and the director of the bureau shall  1 be subject to the standards applicable to federal agencies for the protection of the confidentiality of personally identifiable information and for data security and integrity   2 implement the necessary measures to conform to the standards for data integrity and security described in paragraph 1 and   3 collect and make available information under this section, in accordance with paragraphs 5 and 6 of section 1022 c and the rules prescribed under such paragraphs, in order to protect privacy and confidentiality     sec 1448 definitions for counseling-related programs  section 106 of the housing and urban development act of 1968 12 usc 1701x , as amended by the preceding provisions of this subtitle, is amended by adding at the end the following new subsection  h definitions for purposes of this section  1 nonprofit organization the term nonprofit organization has the meaning given such term in section 104 5 of the cranston-gonzalez national affordable housing act 42 usc 12704 5 , except that subparagraph d of such section shall not apply for purposes of this section   2 state the term state means each of the several states, the commonwealth of puerto rico, the district of columbia, the commonwealth of the northern mariana islands, guam, the virgin islands, american samoa, the trust territories of the pacific, or any other possession of the united states   3 unit of general local government the term unit of general local government means any city, county, parish, town, township, borough, village, or other general purpose political subdivision of a state   4 hud-approved counseling agency the 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 agency the 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       sec 1449 accountability and transparency for grant recipients  section 106 of the housing and urban development act of 1968 12 usc 1701x , as amended by the preceding provisions of this subtitle, is amended by adding at the end the following  i accountability for recipients of covered assistance  1 tracking of funds the 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, the regulations issued under this section, 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, the regulations under this section, 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 funds if 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, the regulations issued under this section, 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 assistance for purposes of this subsection, the term covered assistance means any grant or other financial assistance provided under this section       sec 1450 updating and simplification of mortgage information booklet  section 5 of the real estate settlement procedures act of 1974 12 usc 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 distribution the director of the bureau of consumer financial protection hereafter in this section referred to as the director 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 director shall prepare the booklet in various languages and cultural styles, as the director determines to be appropriate, so that the booklet is understandable and accessible to homebuyers of different ethnic and cultural backgrounds the director shall distribute such booklets to all lenders that make federally related mortgage loans the director 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 usc 1701x e for use in complying with the requirement under subsection c of this section   b contents each booklet shall be in such form and detail as the director shall prescribe and, in addition to such other information as the director 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 director, or to any suitable substitute of such booklet that the director 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 usc 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 consumers 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 and housing and urban development act of 1968 12 usc 1701x e and located in the area of the lender   4 in subsection d , by inserting after the period at the end of the first sentence the following the lender shall provide the booklet in the version that is most appropriate for the person receiving it     sec 1451 home inspection counseling  a public outreach  1 in general the secretary of housing and urban development in this section referred to as the secretary shall take such actions as may be necessary to inform potential homebuyers of the availability and importance of obtaining an independent home inspection such actions shall include  a publication of the hud/fha form hud 92564cn 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 protectionget 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 availability the 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 updating the secretary may periodically update and revise such materials, as the secretary determines to be appropriate    b requirement for fha-approved lenders each 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 agencies each counseling agency certified pursuant by the secretary to provide housing counseling services shall provide each of their clients, as part of the home purchase counseling process, the materials specified in subparagraphs c and d of subsection a 1   d training training provided the department of housing and urban development for housing counseling agencies, whether such training is provided directly by the department or otherwise, shall include  1 providing information on counseling potential 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     sec 1452 warnings to homeowners of foreclosure rescue scams  a assistance to nrc notwithstanding any other provision of law, of any amounts made available for any fiscal year pursuant to section 106 a 4 f of the housing and urban development act of 1968 12 usc 1701x a 4 f as added by section 1444 , 10 percent shall be used only for assistance to the neighborhood reinvestment corporation for activities, in consultation with servicers of residential mortgage loans, to provide notice to 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 notice the neighborhood reinvestment corporation, in consultation with servicers of residential mortgage loans, shall use the amounts provided pursuant to subsection a to carry out 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 departments 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 web sites for housing counseling and for tips for avoiding foreclosure      subtitle e mortgage servicing  sec 1461 escrow and impound accounts relating to certain consumer credit transactions  a in general chapter 2 of the truth in lending act 15 usc 1631 et seq is amended by inserting after section 129c as added by section 1411 the following new section  sec 129d escrow or impound accounts relating to certain consumer credit transactions  a in general except as provided in subsection b , c , d , or e , a creditor, in connection with the consummation of a consumer credit transaction secured by a first lien on the principal dwelling of the consumer, other than a consumer credit transaction under an open end credit plan or a reverse mortgage, shall establish, before the consummation of such transaction, an escrow or impound account for the payment of taxes and hazard insurance, and, if applicable, flood insurance, mortgage insurance, ground rents, and any other required periodic payments or premiums with respect to the property or the loan terms, as provided in, and in accordance with, this section   b when required no impound, trust, or other type of account for the payment of property taxes, insurance premiums, or other purposes relating to the property may be required as a condition of a real property sale contract or a loan secured by a first deed of trust or mortgage on the principal dwelling of the consumer, other than a consumer credit transaction under an open end credit plan or a reverse mortgage, except when  1 any such impound, trust, or other type of escrow or impound account for such purposes is required by federal or state law   2 a loan is made, guaranteed, or insured by a state or federal governmental lending or insuring agency   3 the transaction is secured by a first mortgage or lien on the consumers 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 usc 1454 a 2 , and the annual percentage rate will exceed the average prime offer rate as defined in section 129c by 15 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 usc 1454 a 2 , and the annual percentage rate will exceed the average prime offer rate as defined in section 129c by 25 or more percentage points or    4 so required pursuant to regulation    c exemptions the board may, by regulation, exempt from the requirements of subsection a a creditor that  1 operates predominantly in rural or underserved areas   2 together with all affiliates, has total annual mortgage loan originations that do not exceed a limit set by the board   3 retains its mortgage loan originations in portfolio and   4 meets any asset size threshold and any other criteria the board may establish, consistent with the purposes of this subtitle    d duration of mandatory escrow or impound account an escrow or impound account established pursuant to subsection b shall remain in existence for a minimum period of 5 years, beginning with the date of the consummation of the loan, unless and until  1 such borrower has sufficient equity in the dwelling securing the consumer credit transaction so as to no longer be required to maintain private mortgage insurance   2 such borrower is delinquent   3 such borrower otherwise has not complied with the legal obligation, as established by rule or   4 the underlying mortgage establishing the account is terminated    e limited exemptions for loans secured by shares in a cooperative or in which an association must maintain a master insurance policy escrow accounts need not be established for loans secured by shares in a cooperative insurance premiums need not be included in escrow accounts for loans secured by dwellings or units, where the borrower must join an association as a condition of ownership, and that association has an obligation to the dwelling or unit owners to maintain a master policy insuring the dwellings or units   f clarification on escrow accounts for loans not meeting statutory test for mortgages not covered by the requirements of subsection b , no provision of this section shall be construed as precluding the establishment of an impound, trust, or other type of account for the payment of property taxes, insurance premiums, or other purposes relating to the property  1 on terms mutually agreeable to the parties to the loan   2 at the discretion of the lender or servicer, as provided by the contract between the lender or servicer and the borrower or   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    g administration of mandatory escrow or impound accounts  1 in general except 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 or credit union   2 administration except 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 interest if 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 respa any 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    h disclosures relating to mandatory escrow or impound account in the case of any impound, trust, or escrow account that is required under subsection b , 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 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 board determines necessary for the protection of the consumer    i definitions for purposes of this section, the following definitions shall apply  1 flood insurance the 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 insurance the term hazard insurance shall have the same meaning as provided for hazard insurance , casualty insurance , homeowners insurance , or other similar term under the law of the state where the real property securing the consumer credit transaction is located       b exemptions and modifications the board may prescribe rules that revise, add to, or subtract from the criteria of section 129d b of the truth in lending act if the board determines that such rules are in the interest of consumers and in the public interest   c clerical amendment the table of sections for chapter 2 of the truth in lending act is amended by inserting after the item relating to section 129c as added by section 1411 the following new item     sec 1462 disclosure notice required for consumers who waive escrow services  section 129d of the truth in lending act as added by section 1461 is amended by adding at the end the following new subsection  j disclosure notice required for consumers who waive escrow services  1 in general if  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 requirements any 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 statement 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 board determines necessary for the protection of the consumer        sec 1463 real estate settlement procedures act of 1974 amendments  a servicer prohibitions section 6 of the real estate settlement procedures act of 1974 12 usc 2605 is amended by adding at the end the following new subsections  k servicer prohibitions  1 in general a 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 contracts requirements to maintain property insurance   b charge fees for responding to valid qualified written requests as defined in regulations which the bureau of consumer financial protection shall prescribe under this section   c fail to take timely action to respond to a borrowers requests to correct errors relating to allocation of payments, final balances for purposes of paying off the loan, or avoiding foreclosure, or other standard servicers 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 or assignee of the loan or   e fail to comply with any other obligation found by the bureau of consumer financial protection, by regulation, to be appropriate to carry out the consumer protection purposes of this act    2 force-placed insurance defined for 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 insurance a 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 borrower a 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 borrowers 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 borrowers expense if the borrower does not provide such demonstration of the borrowers 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 demonstration a 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, or as otherwise required by the bureau of consumer financial protection   3 termination of force-placed insurance within 15 days of the receipt by a servicer of confirmation of a borrowers 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 borrowers insurance coverage and the force-placed insurance coverage were each in effect, and any related fees charged to the consumers account with respect to the force-placed insurance during such period    4 clarification with respect to flood disaster protection act no 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 charges all charges, apart from charges subject to state regulation as the business of insurance, related to force-placed insurance imposed on the borrower by or through the servicer shall be bona fide and reasonable     b increase in penalty amounts section 6 f of the real estate settlement procedures act of 1974 12 usc 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 times section 6 e of the real estate settlement procedures act of 1974 12 usc 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 time the 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 payoff section 6 g of the real estate settlement procedures act of 1974 12 usc 2605 g is amended by adding at the end the following new sentence any balance in any such account that is within the servicers 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    sec 1464 truth in lending act amendments  a requirements for prompt crediting of home loan payments chapter 2 of the truth in lending act 15 usc 1631 et seq is amended by inserting after section 129e as added by section 1472 the following new section  sec 129f requirements for prompt crediting of home loan payments  a in general in connection with a consumer credit transaction secured by a consumers principal dwelling, no servicer shall fail to credit a payment to the consumers 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 exception if 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 amounts chapter 2 of the truth in lending act 15 usc 1631 et seq , as amended by this title, is amended by inserting after section 129f as added by subsection a the following new section  sec 129g requests for payoff amounts of home loan  a 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       sec 1465 escrows included in repayment analysis  section 128 b of the truth in lending act 15 usc 1638 b is amended by adding at the end the following new paragraph  4 repayment analysis required to include escrow payments  a in general in 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 value the 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        subtitle f appraisal activities  sec 1471 property appraisal requirements  chapter 2 of the truth in lending act 15 usc 1631 et seq is amended by inserting after 129g as added by section 1464 b the following new section  sec 129h property appraisal requirements  a in general a creditor may not extend credit in the form of a higher-risk 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 visit subject to the rules prescribed under paragraph 4 , an appraisal of property to be secured by a higher-risk mortgage does not meet the requirement of this section unless it is performed by a certified or licensed appraiser who conducts a physical property visit of the interior of the mortgaged property   2 second appraisal under certain circumstances  a in general if the purpose of a higher-risk 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 certified or licensed 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 applicant the cost of any second appraisal required under subparagraph a may not be charged to the applicant    3 certified or licensed appraiser defined for purposes of this section, the term certified or licensed 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    4 regulations  a in general the board, the comptroller of the currency, the federal deposit insurance corporation, the national credit union administration board, the federal housing finance agency, and the bureau shall jointly prescribe regulations to implement this section   b exemption the agencies listed in subparagraph a may jointly exempt, by rule, a class of loans from the requirements of this subsection or subsection a if the agencies determine that the exemption is in the public interest and promotes the safety and soundness of creditors     c free copy of appraisal a creditor shall provide 1 copy of each appraisal conducted in accordance with this section in connection with a higher-risk mortgage to the applicant without charge, and at least 3 days prior to the transaction closing date   d consumer notification at 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 the expense of the applicant   e violations in 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 higher-risk mortgage defined for purposes of this section, the term higher-risk mortgage means a residential mortgage loan, other than a reverse mortgage loan that is a qualified mortgage, as defined in section 129c, secured by a principal dwelling  1 that is not a qualified mortgage, as defined in section 129c and   2 with an annual percentage rate that exceeds the average prime offer rate for a comparable transaction, as defined in section 129c, as of the date the interest rate is set  a by 15 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 usc 1454 a 2   b by 25 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 usc 1454 a 2 and   c by 35 or more percentage points for a subordinate lien residential mortgage loan         sec 1472 appraisal independence requirements  a in general chapter 2 of the truth in lending act 15 usc 1631 et seq is amended by inserting after section 129d as added by section 1461 a the following new section  sec 129e appraisal independence requirements  a in general it 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 act or practice that violates appraisal independence as described in or pursuant to regulations prescribed under this section   b appraisal independence for purposes of subsection a , acts or practices that violate appraisal independence 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, appraisal management company, firm, or other entity 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 when the appraisal report or services are provided for in accordance with the contract between the parties    c exceptions the 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 undertake 1 or more of the following  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 appraisers value conclusion   3 correct errors in the appraisal report    d prohibitions on conflicts of interest no 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 reporting any 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 credit in connection with a consumer credit transaction secured by a consumers 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 rules and interpretive guidelines  1 in general except as provided under paragraph 2 , the board, the comptroller of the currency, the federal deposit insurance corporation, the national credit union administration board, the federal housing finance agency, and the bureau may jointly issue rules, interpretive guidelines, and general statements of policy with respect to acts or practices that violate appraisal independence 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 , f , h , and i   2 interim final regulations the board shall, for purposes of this section, prescribe interim final regulations no later than 90 days after the date of enactment of this section defining with specificity acts or practices that violate appraisal independence 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 rules prescribed by the board under this paragraph shall be deemed to be rules prescribed by the agencies jointly under paragraph 1    h appraisal report portability consistent with the requirements of this section, the board, the comptroller of the currency, the federal deposit insurance corporation, the national credit union administration board, the federal housing finance agency, and the bureau may jointly issue regulations that address the issue of appraisal report portability, including regulations that ensure the portability of the appraisal report between lenders for a consumer credit transaction secured by a 1-4 unit single family residence that is the principal dwelling of the consumer, or mortgage brokerage services for such a transaction   i customary and reasonable fee  1 in general lenders and their agents shall compensate fee appraisers at a rate that is customary and reasonable for appraisal services performed in the market area of the property being appraised evidence for such fees may be established by objective third-party information, such as government agency fee schedules, academic studies, and independent private sector surveys fee studies shall exclude assignments ordered by known appraisal management companies   2 fee appraiser definition for purposes of this section, the term fee appraiser means a person who is not an employee of the mortgage loan originator or appraisal management company engaging the appraiser and is  a a state licensed or certified appraiser who receives a fee for performing an appraisal and certifies that the appraisal has been prepared in accordance with the uniform standards of professional appraisal practice or   b a company not subject to the requirements of section 1124 of the financial institutions reform, recovery, and enforcement act of 1989 12 usc 3331 et seq that utilizes the services of state licensed or certified appraisers and receives a fee for performing appraisals in accordance with the uniform standards of professional appraisal practice    3 exception for complex assignments in the case of an appraisal involving a complex assignment, the customary and reasonable fee may reflect the increased time, difficulty, and scope of the work required for such an appraisal and include an amount over and above the customary and reasonable fee for non-complex assignments    j sunset effective on the date the interim final regulations are promulgated pursuant to subsection g , the home valuation code of conduct announced by the federal housing finance agency on december 23, 2008, shall have no force or effect   k penalties  1 first violation in 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 violations in 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 assessment the 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 amendment the 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 1461 c the following new items    c deference section 105 of the truth in lending act 15 usc 1604 is amended by adding at the end the following  h deference notwithstanding any power granted to any federal agency under this title, the deference that a court affords to the bureau with respect to a determination made by the bureau relating to the meaning or interpretation of any provision of this title, other than section 129e or 129h, shall be applied as if the bureau were the only agency authorized to apply, enforce, interpret, or administer the provisions of this title     d conforming amendments in title x not applicable to sections 129e and 129h notwithstanding section 1099a, the term board in sections 129e and 129h, as added by this subtitle, shall not be substituted by the term bureau    sec 1473 amendments relating to appraisal subcommittee of ffiec, appraiser independence monitoring, approved appraiser education, appraisal management companies, appraiser complaint hotline, automated valuation models, and broker price opinions  a threshold levels section 1112 b of the financial institutions reform, recovery, and enforcement act of 1989 12 usc 3341 b is amended by inserting before the period the following , and receives concurrence from the bureau of consumer financial protection that such threshold level provides reasonable protection for consumers who purchase 14 unit single-family residences   b annual report of appraisal subcommittee section 1103 a of the financial institutions reform, recovery, and enforcement act of 1989 12 usc 3332 a is amended at the end by inserting the following new paragraph  5 transmit an annual report to the congress not later than june 15 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 meetings section 1104 b of the financial institutions reform, recovery, and enforcement act of 1989 12 usc 3333 b is amended  1 by inserting in public session after notice in the federal register, but may close certain portions of these meetings related to personnel and review of preliminary state audit reports, after shall meet and   2 by adding after the final period the following the subject matter discussed in any closed or executive session shall be described in the federal register notice of the meeting    d regulations section 1106 of the financial institutions reform, recovery, and enforcement act of 1989 12 usc 3335 is amended  1 by inserting prescribe regulations in accordance with chapter 5 of title 5, united states code commonly referred to as the administrative procedures act 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, real estate agents, and government agencies, and hold meetings as necessary to support the development of regulations    e appraisal reviews and complex appraisals  1 section 1110 section 1110 of the financial institutions reform, recovery, and enforcement act of 1989 12 usc 3339 is amended  a in paragraph 1 , by striking and   b in paragraph 2 , by striking the period at the end and inserting and and   c by inserting after paragraph 2 the following  3 that such appraisals shall be subject to appropriate review for compliance with the uniform standards of professional appraisal practice      2 section 1113 section 1113 of the financial institutions and reform, recovery, and enforcement act of 1989 12 usc 3342 is amended 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    f appraisal management services  1 supervision of third party providers of appraisal management services section 1103 a of the financial institutions reform, recovery, and enforcement act of 1989 12 usc 3332 a as previously amended by this section is 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  6 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 requirements title xi of the financial institutions reform, recovery, and enforcement act of 1989 12 usc 3331 et seq is amended by adding at the end the following new section and amending the table of contents accordingly  sec 1124 appraisal management company minimum requirements  a in general the board of governors of the federal reserve system, the comptroller of the currency, the federal deposit insurance corporation, the national credit union administration board, the federal housing finance agency, and the bureau of consumer financial protection shall jointly, by rule, establish minimum requirements to be applied by a state in the registration of appraisal management companies such requirements 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 relation to state law nothing in this section shall be construed to prevent states from establishing requirements in addition to any rules promulgated under subsection a   c federally regulated financial institutions the requirements of subsection a shall 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 an appraisal management company that is a subsidiary owned and controlled by a financial institution regulated by a federal financial institution regulatory agency shall not be required to register with a state   d registration limitations an appraisal management company shall not be registered by a state or included on the national registry 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   e reporting the board of governors of the federal reserve system, the comptroller of the currency, the federal deposit insurance corporation, the national credit union administration board, the federal housing finance agency, and the bureau of consumer financial protection shall jointly promulgate regulations for the reporting of the activities of appraisal management companies to the appraisal subcommittee in determining the payment of the annual registry fee   f effective date  1 in general no 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 on which the regulations required to be prescribed under subsection a are prescribed in final form unless such company is registered with such state or subject to oversight by a federal financial institutions regulatory agency   2 extension of effective date subject 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 authority section 1117 of the financial institutions reform, recovery, and enforcement act of 1989 12 usc 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 and the addition of information about the appraisal management company to the national registry   4 appraisal management company definition section 1121 of the financial institutions reform, recovery, and enforcement act of 1989 12 usc 3350 is amended by adding at the end the following  11 appraisal management company the 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 consumers 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 requirement section 1109 a of the financial institutions reform, recovery, and enforcement act of 1989 12 usc 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 the issuance and renewal of licenses and certifications, 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 general section 1109 a of the financial institutions reform, recovery, and enforcement act of 1989 12 usc 3338 a is amended  a by amending paragraph 4 as modified by section 1473 g 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 subcommittees 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 subcommittees functions under this title     and   b by amending the matter following paragraph 4 , as redesignated, to read as follows  amended >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 revenues incremental 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 reports section 1109 b of the financial institutions reform, recovery, and enforcement act of 1989 12 usc 3338 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, in accordance with policies to be developed by the appraisal subcommittee, 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 criteria section 1116 of the financial institutions reform, recovery, and enforcement act of 1989 12 usc 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 requirements any 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 agencies section 1118 of the financial institutions reform, recovery, and enforcement act of 1989 12 usc 3347 is amended  1 by amending subsection a to read as follows  a in general the 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, not to exceed 90 days, 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 analysis 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 reciprocity subsection b of section 1122 of the financial institutions reform, recovery, and enforcement act of 1989 12 usc 3351 b is amended to read as follows  b reciprocity notwithstanding any other provisions of this title, a federally related transaction shall not be appraised by a certified or licensed appraiser unless the state appraiser certifying or licensing agency of the state certifying or licensing such appraiser has in place a policy of issuing 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 designations section 1122 d of the financial institutions reform, recovery, and enforcement act of 1989 12 usc 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 independence section 1122 of the financial institutions reform, recovery, and enforcement act of 1989 12 usc 3351 is amended by adding at the end the following new subsection  g appraiser independence monitoring the appraisal subcommittee shall monitor each state appraiser certifying and licensing agency for the purpose of determining whether such agencys 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 education section 1122 of the financial institutions reform, recovery, and enforcement act of 1989 12 usc 3351 is amended by inserting after subsection g as added by subsection l of this section the following new subsection  h approved education the appraisal subcommittee shall encourage the states to accept courses approved by the appraiser qualification boards course approval program     p appraisal complaint hotline section 1122 of the financial institutions reform, recovery, and enforcement act of 1989 12 usc 3351 , as amended by this section, is amended by adding at the end the following new subsection  i appraisal complaint national hotline if, 6 months 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 models title xi of the financial institutions reform, recovery, and enforcement act of 1989 12 usc 3331 et seq , as amended by this section, is amended by adding at the end the following new section and amending the table of contents accordingly  sec 1125 automated valuation models used to estimate collateral value for mortgage lending purposes  a in general automated 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   4 require random sample testing and reviews and   5 account for any other such factor that the agencies listed in subsection b determine to be appropriate    b adoption of regulations the board, the comptroller of the currency, the federal deposit insurance corporation, the national credit union administration board, the federal housing finance agency, and the bureau of consumer financial protection, in consultation with the staff of the appraisal subcommittee and the appraisal standards board of the appraisal foundation, shall promulgate regulations to implement the quality control standards required under this section   c enforcement compliance 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 participants in the market for appraisals of 1-to-4 unit single family residential real estate, the federal trade commission, the bureau of consumer financial protection, and a state attorney general    d automated valuation model defined for 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 consumers principal dwelling      r broker price opinions title xi of the financial institutions reform, recovery, and enforcement act of 1989 12 usc 3331 et seq , as amended by this section, is amended by adding at the end the following new section and amending the table of contents accordingly  sec 1126 broker price opinions  a general prohibition in conjunction with the purchase of a consumers 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 defined for 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 propertys 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 subcommittee section 1011 of the federal financial institutions examination council act of 1978 12 usc 3310 is amended  1 in the first sentence, by adding before the period the following , the bureau of consumer financial protection, 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 usc 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 usc 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 usc 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 usc 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 councils functions and inserting the councils functions       sec 1474 equal credit opportunity act amendment  subsection e of section 701 of the equal credit opportunity act 15 usc 1691 is amended to read as follows  e copies furnished to applicants  1 in general each creditor shall furnish to an applicant a copy of any and all written appraisals and valuations developed in connection with the applicants 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 applicants request for credit or the application is incomplete or withdrawn   2 waiver the applicant may waive the 3 day requirement provided for in paragraph 1 , except where otherwise required in law   3 reimbursement the 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 copy notwithstanding paragraph 3 , the creditor shall provide a copy of each written appraisal or valuation at no additional cost to the applicant   5 notification to applicants at 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 valuation defined for purposes of this subsection, the term valuation shall include any estimate of the value of a dwelling developed in connection with a creditors 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       sec 1475 real estate settlement procedures act of 1974 amendment relating to certain appraisal fees  section 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 may 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 usc 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       sec 1476 gao study on the effectiveness and impact of various appraisal methods, valuation models and distributions channels, and on the home valuation code of conduct and the appraisal subcommittee  a in general the government accountability office shall conduct a study on  1 the effectiveness and impact of  a appraisal methods, including the cost approach, the comparative sales approach, the income approach, and others that may be available   b appraisal valuation models, including licensed and certified appraisals, broker-priced opinions, and automated valuation models and   c appraisal distribution channels, including appraisal management companies, independent appraisal operations within mortgage originators, and fee-for-service appraisers    2 the home valuation code of conduct and   3 the appraisal subcommittees functions pursuant to title xi of the financial institutions reform, recovery, and enforcement act of 1989    b study not later than  1 12 months after the date of enactment of this act, the government accountability office shall submit a study to the committee on banking, housing, and urban affairs of the senate and the committee on financial services of the house of representatives and   2 90 days after the date of enactment of this act, the government accountability office shall provide a report on the status of the study and any preliminary findings to the committee on banking, housing, and urban affairs of the senate and the committee on financial services of the house of representatives    c content of study the study required by this section shall include an examination of the following  1 appraisal approaches, valuation models, and distribution channels  a the prevalence, alone or in combination, of certain appraisal approaches, models, and channels in purchase-money and refinance mortgage transactions   b the accuracy of these approaches, models, and channels in assessing the property as collateral   c whether and how these approaches, models, and channels contributed to price speculation during the previous cycle   d the costs to consumers of these approaches, models, and channels   e the disclosure of fees to consumers in the appraisal process   f to what extent the usage of these approaches, models, and channels may be influenced by a conflict of interest between the mortgage lender and the appraiser and the mechanism by which the lender selects and compensates the appraiser   g the suitability of these approaches, models, and channels in rural versus urban areas    2 home valuation code of conduct hvcc  a how the hvcc affects mortgage lenders selection of appraisers   b how the hvcc affects state regulation of appraisers and appraisal distribution channels   c how the hvcc affects the quality and cost of appraisals and the length of time to obtain an appraisal   d how the hvcc affects mortgage brokers, small businesses, and consumers     d additional study required  1 in general not later than 18 months after the date of enactment of this act, the government accountability office shall submit a study to the committee on banking, housing, and urban affairs of the senate and the committee on financial services of the house of representatives   2 content of additional study the study required under paragraph 1 shall include  a an examination of  i the appraisal subcommittees ability to monitor and enforce state and federal certification requirements and standards, including by providing a summary with a statistical breakdown of enforcement actions taken during the last 10 years   ii whether existing federal financial institutions regulatory agency exemptions on appraisals for federally related transactions needs to be revised and   iii whether new means of data collection, such as the establishment of a national repository, would benefit the appraisal subcommittees ability to perform its functions and    b recommendations from this examination for administrative and legislative action at the federal and state level       subtitle g mortgage resolution and modification  sec 1481 multifamily mortgage resolution program  a establishment the secretary of housing and urban development shall develop a program under this subsection to ensure the protection of current and future tenants and at-risk multifamily properties, where feasible, based on criteria that may include  1 creating sustainable financing of such properties, that may take into consideration such factors as  a the 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 the enactment of this act   3 providing funds for rehabilitation and   4 facilitating the transfer of such properties, when appropriate and with the agreement of owners, to responsible new owners and ensuring affordability of such properties    b coordination the secretary of housing and urban development may, in carrying out the program developed under this section, coordinate with the secretary of the treasury, 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   c definition for purposes of this section, the term multifamily properties means a residential structure that consists of 5 or more dwelling units   d prevention of qualification for criminal applicants  1 in general no person shall be eligible to begin receiving assistance from the making home affordable program authorized under the emergency economic stabilization act of 2008 12 usc 5201 et seq , or any other mortgage assistance program authorized or funded by that act, on or after 60 days after the date of the enactment of this act, if such person, in connection with a mortgage or real estate transaction, has been convicted, within the last 10 years, of any one of the following  a felony larceny, theft, fraud, or forgery   b money laundering   c tax evasion    2 procedures the secretary shall establish procedures to ensure compliance with this subsection   3 report the secretary shall report to the committee on financial services of the house of representatives and the committee on banking, housing, and urban affairs of the senate regarding the implementation of this provision the report shall also describe the steps taken to implement this subsection     sec 1482 home affordable modification program guidelines  a net present value input data the secretary of the treasury in this section referred to as the secretary shall revise the supplemental directives and other guidelines for the home affordable modification program of the making home affordable initiative of the secretary of the treasury, authorized under the emergency economic stabilization act of 2008 public law 110343 , to require each mortgage servicer participating in such program to provide each borrower under a mortgage whose request for a mortgage modification under the program is denied with all borrower-related and mortgage-related input data used in any net present value npv analyses performed in connection with the subject mortgage such input data shall be provided to the borrower at the time of such denial   b web-based site for npv calculator and application  1 npv calculator in carrying out the home affordable modification program, the secretary shall establish and maintain a site on the world wide web that provides a calculator for net present value analyses of a mortgage, based on the secretarys methodology for calculating such value, that mortgagors can use to enter information regarding their own mortgages and that provides a determination after entering such information regarding a mortgage of whether such mortgage would be accepted or rejected for modification under the program, using such methodology   2 disclosure such web site shall also prominently disclose that each mortgage servicer participating in such program may use a method for calculating net present value of a mortgage that is different than the method used by such calculator   3 application the secretary shall make a reasonable effort to include on such world wide web site a method for homeowners to apply for a mortgage modification under the home affordable modification program    c public availability of npv methodology, computer model, and variables the secretary shall make publicly available, including by posting on a world wide web site of the secretary  1 the secretarys methodology and computer model, including all formulae used in such computer model, used for calculating net present value of a mortgage that is used by the calculator established pursuant to subsection b and   2 all non-proprietary variables used in such net present value analysis     sec 1483 public availability of information of making home affordable program  a revisions to program guidelines the secretary of the treasury in this section referred to as the secretary shall revise the guidelines for the home affordable modification program of the making home affordable initiative of the secretary of the treasury, authorized under the emergency economic stabilization act of 2008 public law 110343 , to provide that the data being collected by the secretary from each mortgage servicer and lender participating in the program is made public in accordance with subsection b   b public availability data shall be made available according to the following guidelines  1 not more than 14 days after each monthly deadline for submission of data by mortgage servicers and lenders participating in the program, reports shall be made publicly available by means of a world wide web site of the secretary, and by submitting a report to the congress, that shall includes the following information  a the number of requests for mortgage modifications under the program that the servicer or lender has received   b the number of requests for mortgage modifications under the program that the servicer or lender has processed   c the number of requests for mortgage modifications under the program that the servicer or lender has approved   d the number of requests for mortgage modifications under the program that the servicer or lender has denied    2 not more than 60 days after each monthly deadline for submission of data by mortgage servicers and lenders participating in the program, the secretary shall make data tables available to the public at the individual record level the secretary shall issue regulations prescribing  a the procedures for disclosing such data to the public and   b such deletions as the secretary may determine to be appropriate to protect any privacy interest of any mortgage modification applicant, including the deletion or alteration of the applicant s name and identification number      sec 1484 protecting tenants at foreclosure extension and clarification  the protecting tenants at foreclosure act is amended  1 in section 702 12 usc 5220 note  a in subsection a 2 , by striking , as of the date of such notice of foreclosure and   b in subsection c , by inserting after the period the following for purposes of this section, the date of a notice of foreclosure shall be deemed to be the date on which complete title to a property is transferred to a successor entity or person as a result of an order of a court or pursuant to provisions in a mortgage, deed of trust, or security deed and    2 in section 704 12 usc 5201 note , by striking 2012 and inserting 2014      subtitle h miscellaneous provisions  sec 1491 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 findings the 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 maes and freddie macs 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 areas 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 788 percent in 2003 to 501 percent by 2007 with a corresponding increase in subprime and alt-a loans from 101 percent to 327 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 maes 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 133 percent of outstanding mortgage debt in the united states and have issued mortgage-backed securities for 310 percent of the residential debt market, a combined total of 443 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 799 percent of each enterprises 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 congress it 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    sec 1492 gao study report on government efforts to combat mortgage foreclosure rescue scams and loan modification fraud  a study the 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 general the 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 topics the 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       sec 1493 reporting of mortgage data by state  a in general section 104 a of the helping families save their homes act of 2009 division a of public law 11122 is amended  1 in paragraph 2 , by striking resulting and inserting in each state that result   2 in paragraph 3 , by inserting each state for after modifications in and   3 in paragraph 4 , by inserting in each state after total number of loans    b conforming amendment section 104 b 1 a of such act is amended by adding at the end the following sentence not later than 60 days after the date of the enactment of the dodd-frank wall street reform and consumer protection act, the comptroller of the currency and the director of the office of thrift supervision shall update such requirements to reflect amendments made to this section by such act    sec 1494 study of effect of drywall presence on foreclosures  a study the 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 report not 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    sec 1495 definition  for purposes of this title, the term designated transfer date means the date established under section 1062 of this act    sec 1496 emergency mortgage relief  a emergency homeowners relief fund effective october 1, 2010, and notwithstanding any other provision of law, there is hereby made available to the secretary of housing and urban development such sums as are necessary to provide $1,000,000,000 in assistance through the emergency homeowners relief fund, which such secretary shall establish pursuant to section 107 of the emergency housing act of 1975 12 usc 2706 , as such act is amended by this section, for use for emergency mortgage assistance in accordance with title i of such act   b reauthorization of emergency mortgage relief program title i of the emergency housing act of 1975 is amended  1 in section 103 12 usc 2702  a in paragraph 2  i by striking have indicated and all that follows through regulation of the holder and insert have certified   ii by striking such as the volume of delinquent loans in its portfolio and   iii by striking , except that such statement and all that follows through purposes of this title and    b in paragraph 4 , by inserting or medical conditions after adverse economic conditions    2 in section 104 12 usc 2703  a in subsection b , by striking , but such assistance and all that follows through the period at the end and inserting the following the amount of assistance provided to a homeowner under this title shall be an amount that the secretary determines is reasonably necessary to supplement such amount as the homeowner is capable of contributing toward such mortgage payment, except that the aggregate amount of such assistance provided for any homeowner shall not exceed $50,000   b in subsection d , by striking interest on a loan or advance and all that follows through the end of the subsection and inserting the following 1 the rate of interest on any loan or advance of credit insured under this title shall be fixed for the life of the loan or advance of credit and shall not exceed the rate of interest that is generally charged for mortgages on single-family housing insured by the secretary of housing and urban development under title ii of the national housing act at the time such loan or advance of credit is made, and 2 no interest shall be charged on interest which is deferred on a loan or advance of credit made under this title in establishing rates, terms and conditions for loans or advances of credit made under this title, the secretary shall take into account a homeowners ability to repay such loan or advance of credit and   c in subsection e , by inserting after the period at the end of the first sentence the following any eligible homeowner who receives a grant or an advance of credit under this title may repay the loan in full, without penalty, by lump sum or by installment payments at any time before the loan becomes due and payable    3 in section 105 12 usc 2704  a by striking subsection b   b in subsection e  i by inserting and emergency mortgage relief payments made under section 106 after insured under this section and   ii by striking $1,500,000,000 at any one time and inserting $3,000,000,000    c by redesignating subsections c , d , and e as subsections b , c , and d , respectively and   d by adding at the end the following new subsection  e the secretary shall establish underwriting guidelines or procedures to allocate amounts made available for loans and advances insured under this section and for emergency relief payments made under section 106 based on the likelihood that a mortgagor will be able to resume mortgage payments, pursuant to the requirement under section 103 5      4 in section 107  a by striking a and   b by striking subsection b    5 in section 108 12 usc 2707 , by adding at the end the following new subsection  d coverage of existing programs the secretary shall allow funds to be administered by a state that has an existing program that is determined by the secretary to provide substantially similar assistance to homeowners after such determination is made such state shall not be required to modify such program to comply with the provisions of this title     6 in section 109 12 usc 2708  a in the section heading, by striking authorization and   b by striking subsection a   c by striking b and   d by striking 1977 and inserting 2011    7 by striking sections 110, 111, and 113 12 usc 2709, 2710, 2712 and   8 by redesignating section 112 12 usc 2711 as section 110     sec 1497 additional assistance for neighborhood stabilization program  a in general effective october 1, 2010, out of funds in the treasury not otherwise appropriated, there is hereby made available to the secretary of housing and urban development $1,000,000,000, and the secretary of housing and urban development shall use such amounts for assistance to states and units of general local government for the redevelopment of abandoned and foreclosed homes, in accordance with the same provisions applicable under the second undesignated paragraph under the heading community planning and developmentcommunity development fund in title xii of division a of the american recovery and reinvestment act of 2009 public law 1115 123 stat 217 to amounts made available under such second undesignated paragraph, except as follows  1 notwithstanding the matter of such second undesignated paragraph that precedes the first proviso, amounts made available by this section shall remain available until expended   2 the 3rd, 4th, 5th, 6th, 7th, and 15th provisos of such second undesignated paragraph shall not apply to amounts made available by this section   3 amounts made available by this section shall be allocated based on a funding formula for such amounts established by the secretary in accordance with section 2301 b of the housing and economic recovery act of 2008 42 usc 5301 note , except that  a notwithstanding paragraph 2 of such section 2301 b , the formula shall be established not later than 30 days after the date of the enactment of this act   b notwithstanding such section 2301 b , each state shall receive, at a minimum, not less than 05 percent of funds made available under this section   c the secretary may establish a minimum grant amount for direct allocations to units of general local government located within a state, which shall not exceed $1,000,000   d each state and local government receiving grant amounts shall establish procedures to create preferences for the development of affordable rental housing for properties assisted with amounts made available by this section and   e the secretary may use not more than 2 percent of the funds made available under this section for technical assistance to grantees    4 paragraph 1 of section 2301 c of the housing and economic recovery act of 2008 shall not apply to amounts made available by this section   5 the fourth proviso from the end of such second undesignated paragraph shall be applied to amounts made available by this section by substituting 2013 for 2012   6 notwithstanding section 2301 a of the housing and economic recovery act of 2008, the term state means any state, as defined in section 102 of the housing and community development act of 1974 42 usc 5302 , and the district of columbia, for purposes of this section and this title, as applied to amounts made available by this section   7  a none of the amounts made available by this section 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    b in this paragraph, the term applicable individual means an individual who  i 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    ii has been convicted for a violation under federal law relating to an election for federal office     8 an eligible entity receiving a grant under this section shall, to the maximum extent feasible, provide for the hiring of employees who reside in the vicinity, as such term is defined by the secretary, of projects funded under this section or contract with small businesses that are owned and operated by persons residing in the vicinity of such projects    b additional amendments  1 section 2301 section 2301 f 3 a ii of the housing and economic recovery act of 2008 42 usc 5301 f 3 a ii  a is amended by striking for the purchase and redevelopment of abandoned and foreclosed upon homes or residential properties that will be used and   b shall apply with respect to any unexpended or unobligated balances, including recaptured and reallocated funds made available under this act, section 2301 of the housing and economic recovery act of 2008 42 usc 5301 , and the heading community planning and developmentcommunity development fund in title xii of division a of the american recovery and reinvestment act of 2009 public law 111-5 123 stat 217    2 notice of foreclosure for any amounts made available under this section, under division b, title iii of the housing and economic recovery act of 2008 42 usc 5301 , or under the heading community planning and developmentcommunity development fund in title xii of division a of the american recovery and reinvestment act of 2009 public law 111-5 123 stat 217 , the date of a notice of foreclosure shall be deemed to be the date on which complete title to a property is transferred to a successor entity or person as a result of an order of a court or pursuant to provisions in a mortgage, deed of trust, or security deed     sec 1498 legal assistance for foreclosure-related issues  a establishment the 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 allocation the 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 areas in allocating amounts in accordance with subsection b , the secretary shall give priority consideration to state and local legal organizations that are operating in the 125 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 general any 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 days any 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 actions no 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 assistance legal 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 date notwithstanding any other provision of this act, this subsection shall take effect on the date of the enactment of this act    e limitation on distribution of assistance  1 in general none 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 individuals in 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 appropriations there are authorized to be appropriated to the secretary $35,000,000 for each of fiscal years 2011 through 2012 for grants under this section     