15 U.S.C. § 1639a — Duty of servicers of residential mort-

Page 1506 TITLE 15—COMMERCE AND TRADE § 1639a the Federal Trade Commission, any violation of a regu- lation issued by the Federal Reserve Board pursuant to subsection (l)(2) of this section shall be treated as a vio- lation of a rule promulgated under section 57a of this title regarding unfair or deceptive acts or practices.’’ Subsecs. (n) to (q). Pub. L. 111–203, § 1433(a)(1), redesig- nated former subsecs. (j) to (m) as (n) to (q), respec- tively. Subsecs. (r) to (v). Pub. L. 111–203, § 1433(b)–(f), added subsecs. (r) to (v). 2009—Subsec. (m). Pub. L. 111–8 added subsec. (m). Statutory Notes and Related Subsidiaries EFFECTIVE DATE OF 2010 AMENDMENT Amendment by section 1100A(2), (9) of Pub. L. 111–203 effective on the designated transfer date, see section 1100H of Pub. L. 111–203, set out as a note under section 552a of Title 5, Government Organization and Employ- ees. Amendment by sections 1432 and 1433 of Pub. L. 111–203 effective on the date on which final regulations implementing that amendment take effect, or on the date that is 18 months after the designated transfer date if such regulations have not been issued by that date, see section 1400(c) of Pub. L. 111–203, set out as a note under section 1601 of this title. § 1639a. Duty of servicers of residential mort- gages (a) In general Notwithstanding any other provision of law, whenever a servicer of residential mortgages agrees to enter into a qualified loss mitigation plan with respect to 1 or more residential mort- gages originated before May 20, 2009, including mortgages held in a securitization or other in- vestment vehicle— (1) to the extent that the servicer owes a duty to investors or other parties to maximize the net present value of such mortgages, the duty shall be construed to apply to all such in- vestors and parties, and not to any individual party or group of parties; and (2) the servicer shall be deemed to have sat- isfied the duty set forth in paragraph (1) if, be- fore December 31, 2012, the servicer imple- ments a qualified loss mitigation plan that meets the following criteria: (A) Default on the payment of such mort- gage has occurred, is imminent, or is reason- ably foreseeable, as such terms are defined by guidelines issued by the Secretary of the Treasury or his designee under the Emer- gency Economic Stabilization Act of 2008 [12 U.S.C. 5201 et seq.]. (B) The mortgagor occupies the property securing the mortgage as his or her principal residence. (C) The servicer reasonably determined, consistent with the guidelines issued by the Secretary of the Treasury or his designee, that the application of such qualified loss mitigation plan to a mortgage or class of mortgages will likely provide an anticipated recovery on the outstanding principal mort- gage debt that will exceed the anticipated recovery through foreclosures. (b) No liability A servicer that is deemed to be acting in the best interests of all investors or other parties under this section shall not be liable to any party who is owed a duty under subsection (a)(1), and shall not be subject to any injunction, stay, or other equitable relief to such party, based solely upon the implementation by the servicer of a qualified loss mitigation plan. (c) Standard industry practice The qualified loss mitigation plan guidelines issued by the Secretary of the Treasury under the Emergency Economic Stabilization Act of 2008 [12 U.S.C. 5201 et seq.] shall constitute standard industry practice for purposes of all Federal and State laws. (d) Scope of safe harbor Any person, including a trustee, issuer, and loan originator, shall not be liable for monetary damages or be subject to an injunction, stay, or other equitable relief, based solely upon the co- operation of such person with a servicer when such cooperation is necessary for the servicer to implement a qualified loss mitigation plan that meets the requirements of subsection (a). (e) Reporting Each servicer that engages in qualified loss mitigation plans under this section shall regu- larly report to the Secretary of the Treasury the extent, scope, and results of the servicer’s modi- fication activities. The Secretary of the Treas- ury shall prescribe regulations or guidance specifying the form, content, and timing of such reports. (f) Definitions As used in this section— (1) the term ‘‘qualified loss mitigation plan’’ means— (A) a residential loan modification, work- out, or other loss mitigation plan, including to the extent that the Secretary of the Treasury determines appropriate, a loan sale, real property disposition, trial modi- fication, pre-foreclosure sale, and deed in lieu of foreclosure, that is described or au- thorized in guidelines issued by the Sec- retary of the Treasury or his designee under the Emergency Economic Stabilization Act of 2008 [12 U.S.C. 5201 et seq.]; and (B) a refinancing of a mortgage under the Hope for Homeowners program; (2) the term ‘‘servicer’’ means the person re- sponsible for the servicing for others of resi- dential mortgage loans (including of a pool of residential mortgage loans); and (3) the term ‘‘securitization vehicle’’ means a trust, special purpose entity, or other legal structure that is used to facilitate the issuing of securities, participation certificates, or similar instruments backed by or referring to a pool of assets that includes residential mort- gages (or instruments that are related to resi- dential mortgages such as credit-linked notes). (g) Rule of construction No provision of subsection (b) or (d) shall be construed as affecting the liability of any servicer or person as described in subsection (d) for actual fraud in the origination or servicing of a loan or in the implementation of a qualified loss mitigation plan, or for the violation of a Page 1507 TITLE 15—COMMERCE AND TRADE § 1639b State or Federal law, including laws regulating the origination of mortgage loans, commonly re- ferred to as predatory lending laws. (Pub. L. 90–321, title I, § 129A, as added Pub. L. 110–289, div. A, title IV, § 1403, July 30, 2008, 122 Stat. 2809; renumbered § 129 and amended Pub. L. 111–22, div. A, title II, § 201(b), May 20, 2009, 123 Stat. 1638; renumbered § 129A, Pub. L. 111–203, title XIV, § 1402(a)(1), July 21, 2010, 124 Stat. 2138.) Editorial Notes REFERENCES IN TEXT The Emergency Economic Stabilization Act of 2008, referred to in subsecs. (a)(2)(A), (c), (f)(1)(A), is div. A of Pub. L. 110–343, Oct. 3, 2008, 122 Stat. 3765, which is clas- sified principally to chapter 52 (§ 5201 et seq.) of Title 12, Banks and Banking. For complete classification of this Act to the Code, see Short Title note set out under sec- tion 5201 of Title 12 and Tables. AMENDMENTS 2009—Pub. L. 111–22 amended section generally. Prior to amendment, section related to fiduciary duty of servicers of pooled residential mortgages without pro- viding for date limitation for implementing modifica- tions or workout plans. Statutory Notes and Related Subsidiaries FINDINGS Pub. L. 111–22, div. A, title II, § 201(a), May 20, 2009, 123 Stat. 1638, provided that: ‘‘Congress finds the following: ‘‘(1) Increasing numbers of mortgage foreclosures are not only depriving many Americans of their homes, but are also destabilizing property values and negatively affecting State and local economies as well as the national economy. ‘‘(2) In order to reduce the number of foreclosures and to stabilize property values, local economies, and the national economy, servicers must be given— ‘‘(A) authorization to— ‘‘(i) modify mortgage loans and engage in other loss mitigation activities consistent with applica- ble guidelines issued by the Secretary of the Treasury or his designee under the Emergency Economic Stabilization Act of 2008 [12 U.S.C. 5201 et seq.]; and ‘‘(ii) refinance mortgage loans under the Hope for Homeowners program; and ‘‘(B) a safe harbor to enable such servicers to ex- ercise these authorities.’’ § 1639b. Residential mortgage loan origination (a) Finding and purpose (1) Finding The Congress finds that economic stabiliza- tion would be enhanced by the protection, lim- itation, and regulation of the terms of residen- tial mortgage credit and the practices related to such credit, while ensuring that respon- sible, affordable mortgage credit remains available to consumers. (2) Purpose It is the purpose of this section and section 1639c of this title 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, reg- istered and licensed as a mortgage origi- nator in accordance with applicable State or Federal law, including the Secure and Fair Enforcement for Mortgage Licensing Act of 2008 [12 U.S.C. 5101 et seq.]; and (B) include on all loan documents any unique identifier of the mortgage originator provided by the Nationwide Mortgage Li- censing System and Registry. (2) Compliance procedures required The Bureau shall prescribe regulations re- quiring 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 require- ments of this section and the registration pro- cedures established under section 1507 of the Secure and Fair Enforcement for Mortgage Li- censing Act of 2008 [12 U.S.C. 5106]. (c) Prohibition on steering incentives (1) In general For any residential mortgage loan, no mort- gage originator shall receive from any person and no person shall pay to a mortgage origi- nator, 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 origi- nator 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 com- pensated or will directly compensate a mort- gage originator may pay a mortgage origi- nator any origination fee or charge except bona fide third party charges not retained by the creditor, mortgage originator, or an af- filiate of the creditor or mortgage origi- nator. (B) Exception Notwithstanding subparagraph (A), a mortgage originator may receive from a per- son 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 re- ceive any compensation directly from the consumer; and (ii) the consumer does not make an up- front payment of discount points, origina- tion 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 Bureau may, by rule, waive or provide exemptions to this clause if the Bureau determines that such waiver or exemption is in the interest of consumers and in the public interest.