text: SECTION 1. SHORT TITLE.
  
      This Act may be cited as the ``Mortgage Broker Transparency and 
  Accountability Act of 2007''.
  
  SEC. 2. MORTGAGE BROKER REQUIREMENTS.
  
      The Truth in Lending Act (15 U.S.C. 1601 et seq.) is amended by 
  inserting after section 129 the following new section:
  ``Sec. 129A. Duties of mortgage brokers
      ``(a) Definitions.--For purposes of this section, the following 
  definitions shall apply:
              ``(1) Home mortgage loan.--The term `home mortgage loan' 
          means any consumer credit transaction in which a security 
          interest, including any such interest arising by operation of 
          law, is or will be retained or acquired in any real property 
          located within the United States which is or, upon the 
          completion of the transaction, will be used as the principal 
          residence of the consumer.
              ``(2) Mortgage broker.--The term `mortgage broker' means 
          any person who, for compensation or in anticipation of 
          compensation, provides mortgage brokerage services with respect 
          to home mortgage loans for which the person is not the creditor 
          and includes any loan correspondents that provide such 
          services.
              ``(3) Mortgage brokerage services.--The term `mortgage 
          brokerage services' means any of the following services:
                      ``(A) Arranging or negotiating, or attempting to 
                  arrange or negotiate, home mortgage loans or 
                  commitments for such loans.
                      ``(B) Referring consumer applicants or prospective 
                  applicants for home mortgage loans to creditors.
                      ``(C) Selecting or offering to select, on behalf of 
                  consumers, creditors to whom requests for an extension 
                  of a home mortgage loan may be made.
      ``(b) Mortgage Broker Responsibilities and Duties.--
              ``(1) Agency by operation of law.--A mortgage broker who 
          provides mortgage brokerage services to any consumer shall be 
          deemed to have an agency relationship with the consumer for 
          such purposes and the broker shall be subject to all 
          requirements for agents of consumers that are applicable under 
          State or Federal law in connection with providing such 
          services.
              ``(2) Broker duties.--In providing any mortgage brokerage 
          services to any consumer, the mortgage broker shall--
                      ``(A) act with reasonable skill, care, and 
                  diligence in providing any such services to the 
                  consumer and provide the consumer with a reasonable 
                  choice among available home mortgage loan products that 
                  meet the consumer's stated needs for mortgage 
                  financing;
                      ``(B) disclose to a consumer the risks and benefits 
                  of each home mortgage loan product offered to the 
                  borrower, including any possibility of, and the 
                  possible extent of, a payment increase at the time of 
                  any resetting of rate, the extent of any prepayment 
                  penalties, balloon payments, and the consumer's 
                  responsibilities to pay taxes and insurance with 
                  respect to such product;
                      ``(C) disclose to the consumer--
                              ``(i) all fees or other payments the 
                          mortgage broker may or will receive, if any, 
                          from a creditor in connection with each home 
                          mortgage loan product that is offered or 
                          disclosed to the consumer, directly or 
                          indirectly, in the course of providing such 
                          services;
                              ``(ii) the amount of each such fee or 
                          payment;
                              ``(iii) the rate used to determine the 
                          amount of any such fee;
                              ``(iv) how the consumer may use the amount 
                          of such fees or payments to reduce settlement 
                          costs otherwise applicable to the consumer upon 
                          entering into consumer credit transaction 
                          involving such home mortgage loan product; and
                              ``(v) all fees or other payments the 
                          mortgage broker may or will receive, if any, 
                          from the consumer in connection with each home 
                          mortgage loan product that is offered or 
                          disclosed to the consumer, directly or 
                          indirectly, in the course of providing such 
                          services;
                      ``(D) meet all applicable licensing requirements 
                  under State or local law; and
                      ``(E) obtain and permanently maintain a bond--
                              ``(i) for an amount equal to not less than 
                          1 percent of the aggregate value of all direct 
                          and indirect fees received by the mortgage 
                          broker in connection with providing mortgage 
                          brokerage services in the calendar year 
                          preceding the date of the transaction;
                              ``(ii) that inures, first, to the benefit 
                          of any consumer who has any claim against the 
                          mortgage broker under this title or any other 
                          applicable provision of law; and, second, to 
                          the benefit of creditors that deal with 
                          mortgage brokers in accordance with this title; 
                          and
                              ``(iii) under which any assignee or 
                          subsequent transferee or trustee of a consumer 
                          or creditor remains a beneficiary of the bond.
              ``(3) Steering prohibited.--In connection with a home 
          mortgage loan, a mortgage broker may not steer, counsel, or 
          direct a consumer to a higher-cost mortgage as evidenced by 
          higher rates, charges, principal amounts, or the inclusion of 
          prepayment penalties or other terms than a lower-cost mortgage 
          for which the consumer would otherwise qualify, considering the 
          loan features requested by the consumer.
      ``(c) Statutory Obligation.--No requirement imposed on any mortgage 
  broker under this section may be waived by any consumer or by the terms 
  of any agreement executed between the mortgage broker and any consumer.
      ``(d) Enforcement.--For purposes of providing a cause of action for 
  any failure to comply with any requirement imposed this section, 
  section 130(a) shall be applied with respect to any such failure--
              ``(1) by substituting `mortgage broker' for `creditor' each 
          place such term appears in such section; and
              ``(2) by treating all points, fees, and costs incurred in 
          the origination of any home mortgage loan as actual damages 
          sustained by the consumer as a result of the failure.''.
  
  SEC. 3. DISCLOSURE OF AFFILIATIONS.
  
      The Truth in Lending Act (15 U.S.C. 1601 et seq.) is amended by 
  inserting after section 129A (as added by section 2 of this Act) the 
  following new section:
  ``Sec. 129B. Disclosures in connection with all home mortgage loans
      ``Each creditor, mortgage broker (as defined in section 129A), or 
  other person involved in making or obtaining a home mortgage loan (as 
  defined in section 129A) to or for any consumer shall disclose to the 
  consumer any financial or other business relationship the creditor, 
  mortgage broker, or other person has with any person that may be 
  involved in the transaction resulting in the home mortgage loan, 
  including any real estate agent, any person providing title insurance, 
  any person providing settlement services (as defined in section 3 of 
  the Real Estate Settlement Procedures Act of 1974), or any person 
  providing table-top financing (in the case of a loan correspondent) and 
  information sufficient to inform the consumer about the relationship, 
  including whether the relationship is exclusive.''.
  
  SEC. 4. 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:
  
  ``129A. Duties of mortgage brokers.
  ``129B. Disclosures in connection with all home mortgage loans.''.
target: Mortgage Broker Transparency and Accountability Act of 2007  Amends the Truth in Lending Act to establish mandatory responsibilities, duties, and disclosures governing mortgage brokers.
  
  Deems any mortgage broker to have a statutory agency relationship with the consumer subject to all requirements under state or federal law.
  
  Sets forth disclosure requirements, including disclosure of: (1) the risks and benefits of each home mortgage loan product; (2) possible payment increases at the time of any resetting of rate; (3) the extent of any prepayment penalties and balloon payments; and (4) the consumer's responsibilities to pay taxes and insurance with respect to such product.
  
  Requires mortgage brokers to maintain a bond that inures, first, to the benefit of any consumer who has any claim against the mortgage broker under this Act.
  
  Prohibits: (1) mortgage brokers from steering a consumer to a higher-cost mortgage than one for which the consumer would otherwise qualify; and (2) waiver by a consumer of the requirements imposed upon a mortgage broker under this Act.
  
  Requires disclosure of specified affiliations on the part of persons involved in the home mortgage loan process.
feat_title: To amend the Truth in Lending Act to establish transparency and accountability requirements for mortgage brokers, and for other purposes.