Sec. 101. MINIMUM STANDARDS FOR RESIDENTIAL MORTGAGE LOANS
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## SEC. 101 MINIMUM STANDARDS FOR RESIDENTIAL MORTGAGE LOANS Section 129C(b)(2) of the Truth in Lending Act (15 U.S.C. 1639c(b)(2)) is amended by adding at the end the following: > > ##### “(F) Safe harbor > > > ###### “(i) Definitions > > In this subparagraph— > > > ###### “(I) > > the term ‘covered institution’ means an insured depository institution or an insured credit union that, together with its affiliates, has less than $10,000,000,000 in total consolidated assets; > > > ###### “(II) > > the term ‘insured credit union’ has the meaning given the term in section 101 of the Federal Credit Union Act (12 U.S.C. 1752); > > > ###### “(III) > > the term ‘insured depository institution’ has the meaning given the term in section 3 of the Federal Deposit Insurance Act (12 U.S.C. 1813); > > > ###### “(IV) > > the term ‘interest-only’ means that, under the terms of the legal obligation, one or more of the periodic payments may be applied solely to accrued interest and not to loan principal; and > > > ###### “(V) > > the term ‘negative amortization’ means payment of periodic payments that will result in an increase in the principal balance under the terms of the legal obligation. > > > ###### “(ii) Safe harbor > > In this section— > > > ###### “(I) > > the term ‘qualified mortgage’ includes any residential mortgage loan— > > > ###### “(aa) > > that is originated and retained in portfolio by a covered institution; > > > ###### “(bb) > > that is in compliance with the limitations with respect to prepayment penalties described in subsections (c)(1) and (c)(3); > > > ###### “(cc) > > that is in compliance with the requirements of clause
(vii)of subparagraph (A); > > > ###### “(dd) > > that does not have negative amortization or interest-only features; and > > > ###### “(ee) > > for which the covered institution considers and documents the debt, income, and financial resources of the consumer in accordance with clause (iv); and > > > ###### “(II) > > a residential mortgage loan described in subclause
(I)shall be deemed to meet the requirements of subsection (a). > > > ###### “(iii) Exception for certain transfers > > A residential mortgage loan described in clause (ii)(I) shall not qualify for the safe harbor under clause
(ii)if the legal title to the residential mortgage loan is sold, assigned, or otherwise transferred to another person unless the residential mortgage loan is sold, assigned, or otherwise transferred— > > > ###### “(I) > > to another person by reason of the bankruptcy or failure of a covered institution; > > > ###### “(II) > > to a covered institution so long as the loan is retained in portfolio by the covered institution to which the loan is sold, assigned, or otherwise transferred; > > > ###### “(III) > > pursuant to a merger of a covered institution with another person or the acquisition of a covered institution by another person or of another person by a covered institution, so long as the loan is retained in portfolio by the person to whom the loan is sold, assigned, or otherwise transferred; or > > > ###### “(IV) > > to a wholly owned subsidiary of a covered institution, provided that, after the sale, assignment, or transfer, the residential mortgage loan is considered to be an asset of the covered institution for regulatory accounting purposes. > > > ###### “(iv) Consideration and documentation requirements > > The consideration and documentation requirements described in clause (ii)(I)(ee) shall— > > > ###### “(I) > > not be construed to require compliance with, or documentation in accordance with, appendix Q to part 1026 of title 12, Code of Federal Regulations, or any successor regulation; and > > > ###### “(II) > > be construed to permit multiple methods of documentation.” > .
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