text: SECTION 1. SHORT TITLE.
  
      This Act may be cited as the ``Real Estate Transparency Act of 
  2007''.
  
  SEC. 2. GREATER TRANSPARENCY OF SETTLEMENT FEES.
  
      (a) In General.--Section 4 of the Real Estate Settlement Procedures 
  Act of 1974 (12 U.S.C. 2603) is amended--
              (1) in subsection (a), in the first sentence, by striking 
          ``The Secretary,'' and inserting ``Provision of Settlement 
          Statement.--The Secretary,'';
              (2) in subsection (b)--
                      (A) in the first sentence--
                              (i) by striking ``The form'' and inserting 
                          ``Advance Inspection of Settlement Statement.--
                          The form''; and
                              (ii) by striking ``, except'' and all that 
                          follows through ``available at such time''; and
                      (B) in the second sentence--
                              (i) by striking ``Upon the request of the 
                          borrower to inspect the form prescribed under 
                          this section during the'' and inserting ``At 
                          least 1'';
                              (ii) by striking ``shall permit the'' and 
                          inserting ``shall provide a completed, written 
                          copy of the settlement statement to the''; and
                              (iii) by striking ``to inspect those'' and 
                          all that follows through ``preceding day''; and
              (3) by adding at the end the following:
      ``(c) Agreement for Originator Fees.--
              ``(1) Notice of fees.--Not later than 3 days after a person 
          applies for a federally related mortgage loan, the mortgage 
          originator of such loan shall provide to that person a written 
          agreement itemizing all of the fees that person may be charged 
          by the mortgage originator, including any origination fees, 
          underwriting fees, broker fees, and any other fees to be 
          charged at or before the settlement of such loan to be paid to 
          the mortgage originator. Bona fide discount points payable by 
          such person to reduce the interest rate of such loan need not 
          be included on any originator fees agreement under this 
          paragraph.
              ``(2) Method of payment.--
                      ``(A) In general.--Each originator fee agreement 
                  under paragraph (1) shall set out the following 3 
                  methods for the payment of the fees described in any 
                  such agreement:
                              ``(i) Payment in cash before or at 
                          settlement.
                              ``(ii) Adding such fees into the total loan 
                          amount to be borrowed.
                              ``(iii) Increasing the interest rate of the 
                          loan.
                      ``(B) Borrower's choice of payment method.--Each 
                  applicant for a federally related mortgage loan, in 
                  determining how to pay any of the fees described in an 
                  originator fees agreement under paragraph (1), shall 
                  choose one of the payment methods described under 
                  subparagraph (A), except that the applicant may choose 
                  to combine the payment methods described under clauses 
                  (i) and (ii) of subparagraph (A).
                      ``(C) Required explanation.--
                              ``(i) Written.--Each originator fee 
                          agreement under paragraph (1) shall include a 
                          written explanation of each of the payment 
                          options listed in subparagraph (A), along with 
                          a clear and concise illustration of the effect 
                          of each option on the amount borrowed, the 
                          interest rate, the payments required on the 
                          loan, and any other loan terms which might be 
                          affected by such option.
                              ``(ii) Oral.--Each mortgage originator of a 
                          federally related mortgage loan shall explain 
                          to each applicant for such a loan each of the 
                          payment options listed in subparagraph (A) 
                          before accepting any payment from that person.
                      ``(D) Required signature.--Before any applicant for 
                  a federally related mortgage loan is obligated to pay 
                  any of the fees described in the originator fees 
                  agreement under paragraph (1), the person shall have--
                              ``(i) agreed to and signed the originator 
                          fees agreement described under paragraph (1); 
                          and
                              ``(ii) exercised the option for determining 
                          the method of payment for such fees.
      ``(d) Early Settlement Statement.--
              ``(1) In general.--Not later than 3 days after a person 
          applies for a federally related mortgage loan, the mortgage 
          originator of such loan shall provide to that person a written 
          early settlement statement of all of the settlement costs to be 
          charged to that person at or before settlement. The early 
          settlement statement shall be in the same or a similar form as 
          the statement of settlement costs provided to the person 
          pursuant to subsection (a).
              ``(2) Required inclusions.--Each early settlement statement 
          under this subsection shall include an itemization of the 
          following:
                      ``(A) All fees agreed to by the applicant of a 
                  federally related mortgage loan pursuant to the 
                  originator fees agreement described under subsection 
                  (c)(1).
                      ``(B) All fees to be charged to that applicant by 
                  independent third parties, including government 
                  agencies at or before settlement of the loan, plus all 
                  escrows reserves which may be required of that person.
      ``(e) Borrower Liability for Fees.--No borrower shall be liable for 
  any fees which are not disclosed on an early settlement statement, 
  except that the borrower is liable for such fees if--
              ``(1) the total amount charged for fees imposed by 
          independent third parties is--
                      ``(A) not more than 10 percent greater than that 
                  stated in the early settlement statement; or
                      ``(B) greater than that allowed under subparagraph 
                  (A) because bona fide and reasonable expenses were 
                  incurred by such third parties for unanticipated 
                  inspection, appraisal, survey, or flood certification 
                  of the home which was the subject of such loan;
              ``(2) the mortgage originator provides a reasonable 
          explanation of the circumstances surrounding the settlement of 
          the loan of the borrower which were different than anticipated 
          by the mortgage originator when the statement was provided; and
              ``(3) the mortgage originator does not engage in a pattern 
          or practice of providing early settlement statements which 
          disclose individual fees of independent third parties in 
          different amounts than actually charged at settlement.
      ``(f) Liability for Failure To Comply.--
              ``(1) In general.--Whoever fails to comply with any 
          provision of this section shall be liable to the borrower for 
          an amount equal to the sum of--
                      ``(A) any actual damages to the borrower as a 
                  result of the failure; and
                      ``(B) $5,000 for each such instance of 
                  noncompliance.
              ``(2) Court costs.--In addition to any amount under 
          paragraph (1), in the case of any successful action brought by 
          a borrower under this subsection, such borrower shall be 
          reimbursed for the costs of the action, together with any 
          attorneys fees incurred in connection with such action as the 
          court may determine to be reasonable under the circumstances.
      ``(g) Definition.--As used in this section, the term `mortgage 
  originator'--
              ``(1) means any person who, for direct or indirect 
          compensation or gain, or in the expectation of direct or 
          indirect compensation or gain--
                      ``(A) takes a residential mortgage loan 
                  application; or
                      ``(B) assists a consumer in obtaining or applying 
                  to obtain a residential mortgage loan; and
              ``(2) includes any person who makes loans directly or 
          brokers loans for others.''.
      (b) Conforming Amendment.--Section 5(c) of the Real Estate 
  Settlement Procedures Act of 1974 (12 U.S.C. 2604(c)) is hereby 
  repealed.
target: Real Estate Transparency Act of 2007 - Amends the Real Estate Settlement Procedures Act of 1974 to modify requirements governing settlement statements.
  
  Requires the originator of a federally related mortgage loan to provide, within three days of a loan application, a written agreement to the applicant itemizing all of the fees the originator may charge at or before loan settlement, including origination, underwriting, and broker fees. Excludes from such requirement bona fide discount points payable by the borrower to reduce the loan's interest rate.
  
  Requires an originator fee agreement to set out the following fee payment methods: (1) paying in cash before or at settlement; (2) adding such fees into the total loan amount to be borrowed; and (3) increasing the loan's interest rate.
  
  Requires: (1) written and oral explanations of a borrower's payment options; and (2) a borrower's signature attesting agreement with originator fees and with the chosen method of payment.
  
  Requires the originator to provide the applicant with a written early settlement statement of all settlement costs to be charged at or before settlement.
  
  Shields borrowers from liability for any such fees not disclosed on an early settlement statement, except in certain circumstances.
  
  Establishes originator liability to a borrower for non-compliance with this Act, including reimbursement of the borrower for court costs.
  
  Repeals the requirement that special information booklets prepared by the Secretary of Housing and Urban Development (HUD) for borrowers contain a good faith estimate of the amount or range of expected settlement charges.
feat_title: A bill to amend the Real Estate Settlement Procedures Act to require mortgage originators to make their fees more transparent.