To amend the Truth in Lending Act to limit the liability of any assignee of a creditor, and for other purposes.

June 25, 2004

Mr. BAKER (for himself, Mr. ROYCE, and Mr. HENSARLING) introduced the following bill; which was referred to the Committee on Financial Services

To amend the Truth in Lending Act to limit the liability of any assignee of a creditor, and for other purposes.

Be it enacted by the Senate and House of Representatives of the United States of America in Congress assembled,

SECTION 1. SHORT TITLE.

This Act may be cited as the `Mortgage Market Protection Act of 2004'.

SEC. 2. LIMITATION ON LIABILITY OF THE ASSIGNEE OF A CREDITOR.

(a) Violations Apparent on Face of Disclosure Statements- Section 131(a) of Truth in Lending Act (15 U.S.C. 1641(a)) is amended--

(1) by striking `(a) Except as otherwise' and inserting `(a) Civil Action Against Assignees--

`(1) In general- Except as otherwise provided';

(2) by striking the 2nd sentence; and

(3) by adding at the end the following new paragraph:

`(2) Violations apparent on face of documents- For the purpose of this section, a violation is apparent on the face of the disclosure document if--

`(A) the disclosure can be determined to be incomplete or inaccurate from a comparison of any disclosure provided pursuant to section 127, 127A, 128, or 129, a uniform disclosure statement provided pursuant to section 4 of the Real Estate Settlement Procedures Act of 1974, the promissory note or other instrument signed by the consumer under which credit was extended, and any itemization of the amount financed; or

`(B) any disclosure provided pursuant to section 127, 127A, 128, or 129 does not contain terms required to be used under this title.'.

(b) Repeal of Right to Rescind Any Credit Transaction as Against an Assignee- Subsection (c) of section 131 of the Truth in Lending Act (15 U.S.C. 1641(c)) is amended to read as follows:

`(c) [Repealed]'.

(c) Limitation on Rights Upon Assignment of High Cost Mortgages- Subsection (d) of section 131 of Truth in Lending Act (15 U.S.C. 1641(d) is amended--

(1) by striking paragraph (1) and inserting the following new paragraph:

`(1) In general- Notwithstanding any other provision of law, any person who purchases or is otherwise assigned a mortgage referred to in section 103(aa) shall be liable, jointly and severally with the original creditor and any prior or subsequent assignee, for all material violations committed by the original creditor, to the extent that the violation is apparent on the face of the disclosure.';

(2) by striking paragraph (2) and inserting the following new paragraph:

`(2) Limitation on damages- Notwithstanding any other provision of law--

`(A) a cause of action for a liability described in paragraph (1) may be asserted by the borrower only in an individual action;

`(B) in any such action the amount of relief shall not exceed the sum of all of the amounts that the borrower has paid in connection with the loan and reasonable attorney's fees in such individual action;

`(C) no such action may be brought after the end of the 3-year period beginning on the the date of the violation giving rise to the liability; and

`(D) such cause of action shall constitute the exclusive remedy of the consumer against an assignee of a mortgage referred to in section 103(aa).'; and

(3) by striking paragraph (3) and inserting the following new paragraph:

`(3) Denial of rescission rights as against assignees of high cost mortgages- Notwithstanding any other provision of this title, no provision of this title that permits a consumer to void or rescind a mortgage referred to in section 103(aa) shall apply with respect to any assignee of such mortgage.'.

(d) Technical and Conforming Amendment- Subsection (e) of section 131 of the Truth in Lending Act (15 U.S.C. 1641(e)) is amended to read as follows:

`(e) [Repealed]'.

END