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Full Text of this Amendment

SA 4411. Mr. KOHL (for himself and Mrs. Lincoln) submitted an amendment intended to be proposed to amendment SA 4387 submitted by Mr. Dodd (for himself and Mr. Shelby) to the bill H.R. 3221, moving the United States toward greater energy independence and security, developing innovative new technologies, reducing carbon emissions, creating green jobs, protecting consumers, increasing clean renewable energy production, and modernizing our energy infrastructure, and to
amend the Internal Revenue Code of 1986 to provide tax incentives for the production of renewable energy and energy conservation; which was ordered to lie on the table; as follows:

On page 82, between lines 7 and 8, insert the following:

In this title:
(1) COMMISSION.--The term ``Commission'' means the Federal Trade Commission.
(2) FORECLOSURE CONSULTANT.--The term ``foreclosure consultant''--
(A) means a person who directly or indirectly makes any solicitation, representation, or offer to a homeowner facing foreclosure on residential real property to perform, with or without compensation, or who performs, with or without compensation, any service that such person represents will prevent, postpone, or reverse the effect of such foreclosure; and
(B) does not include--
(i) an attorney licensed to practice law in the State in which the property is located who has established an attorney-client relationship with the homeowner;
(ii) a housing counseling agency approved by the Secretary; or
(iii) a person licensed as a real estate broker or salesperson in the State where the property is located, and such person engages in acts permitted under the licensure laws of such State.
(3) HOMEOWNER.--The term ``homeowner'', with respect to residential real property for which an action to foreclose on the mortgage or deed of trust on such real property is filed, means the person holding record title to such property as of the date on which such action is filed.
(4) LOAN SERVICER.--The term ``loan servicer'' has the same meaning as the term ``servicer'' in section 6(i)(2) of the Real Estate Settlement Procedures Act of 1974 (12 U.S.C. 2605(i)(2)).
(5) RESIDENTIAL MORTGAGE LOAN.--The term ``residential mortgage loan'' means any loan primarily for personal, family, or household use that is secured by a mortgage, deed of trust, or other equivalent consensual security interest on a dwelling (as defined in section 103(v) of the Truth in Lending Act (15 U.S.C. 1602)(v)) or residential real estate upon which is constructed or intended to be constructed a dwelling (as so defined).
(6) RESIDENTIAL REAL PROPERTY.--The term ``residential real property'' has the meaning given the term ``dwelling'' in section 103 of the Consumer Credit Protection Act (15 U.S.C. 1602).
(7) SECRETARY.--The term ``Secretary'' means the Secretary of Housing and Urban Development.
(a) Limits on Foreclosure Consultants.--A foreclosure consultant may not--
(1) claim, demand, charge, collect, or receive any compensation from a homeowner for services performed by such foreclosure consultant with respect to residential real property until such foreclosure consultant has fully performed each service that such foreclosure consultant contracted to perform or represented would be performed with respect to such residential real property;
(2) hold any power of attorney from any homeowner, except to inspect documents, as provided by applicable law;
(3) receive any consideration from a third party in connection with services rendered to a homeowner by such third party with respect to the foreclosure of residential real property, unless such consideration is fully disclosed to such homeowner in writing before such services are rendered;
(4) accept any wage assignment, any lien of any type on real or personal property, or other security to secure the payment of compensation with respect to services provided by such foreclosure consultant in connection with the foreclosure of residential real property; or
(5) acquire any interest, directly or indirectly, in the residence of a homeowner with whom the foreclosure consultant has contracted.
(b) Contract Requirements.--
(1) WRITTEN CONTRACT REQUIRED.--Notwithstanding any other provision of law, a foreclosure consultant may not provide to a homeowner a service related to the foreclosure of residential real property--
(A) unless--
(i) a written contract for the purchase of such service has been signed and dated by the homeowner; and
(ii) such contract complies with the requirements described in paragraph (2); and
(B) before the end of the 3-business day period beginning on the date on which the contract is signed.
(2) TERMS AND CONDITIONS OF CONTRACT.--The requirements described in this paragraph, with respect to a contract, are as follows:
(A) The contract includes, in writing--
(i) a full and detailed description of the exact nature of the contract and the total amount and terms of compensation;
(ii) the name, physical address, phone number, email address, and facsimile number, if any, of the foreclosure consultant to whom a notice of cancellation can be mailed or sent under subsection (d); and
(iii) a conspicuous statement in at least 12 point bold face type in immediate proximity to the space reserved for the homeowner's signature on the contract that reads as follows: ``You may cancel this contract without penalty or obligation at any time before midnight of the 3rd business day after the date on which you sign the contract. See the attached notice of cancellation form for an explanation of this right.''.
(B) The contract is written in the principal language used by both the homeowner and the foreclosure consultant.
(C) The contract is accompanied by the form required by subsection (c)(2).
(c) Right to Cancel Contract.--
(1) IN GENERAL.--With respect to a contract between a homeowner and a foreclosure consultant regarding the foreclosure on the residential real property of such homeowner, such homeowner may cancel such contract without penalty or obligation by mailing a notice of cancellation not later than midnight of the 3rd business day after the date on which such contract is executed or would become enforceable against the parties to such contract.
(2) CANCELLATION FORM AND OTHER INFORMATION.--Each contract described in paragraph (1) shall be accompanied by a form, in duplicate, that--
(A) has the heading ``Notice of Cancellation'' in boldface type; and
(B) contains in boldface type the following statement:
``You may cancel this contract, without any penalty or obligation, at any time before midnight of the 3rd day after the date on which the contract is signed by you.
``To cancel this contract, mail or deliver a signed and dated copy of this cancellation notice or any other equivalent written notice to [insert name of foreclosure consultant] at [insert address of foreclosure consultant] before midnight on [insert date].
``I hereby cancel this transaction on [insert date] [insert homeowner signature].''.
(d) Waiver of Rights and Protections Prohibited.--
(1) IN GENERAL.--A waiver by a homeowner of any protection provided by this section or any right of a homeowner under this section--
(A) shall be treated as void; and
(B) may not be enforced by any Federal or State court or by any person.
(2) ATTEMPT TO OBTAIN A WAIVER.--Any attempt by any person to obtain a waiver from any homeowner of any protection provided by this section or any right of the homeowner under this section shall be treated as a violation of this section.
(3) CONTRACTS NOT IN COMPLIANCE.--Any contract that does not comply with the applicable provisions of this title shall be void and may not be enforceable by any party.
(a) In General.--If a loan servicer finds that a homeowner has failed to make 2 consecutive payments on a residential mortgage loan and such loan is at risk of being foreclosed upon, the loan servicer shall notify such homeowner of the dangers of fraudulent activities associated with foreclosure.
(b) Notice Requirements.--Each notice provided under subsection (a) shall--
(1) be in writing;
(2) be included with a mailing of account information;
(3) have the heading ``Notice Required by Federal Law'' in a 14-point boldface type in English and Spanish at the top of such notice; and
(4) contain the following statement: ``Mortgage foreclosure is a complex process. Some people may approach you about saving your home. You should be careful about any such promises. There are government and nonprofit agencies you may contact for helpful information about the foreclosure process. Contact your lender immediately at [__XX], call the Department of Housing and Urban Development Housing Counseling Line at (800) 569-4287 to find a housing counseling agency certified by the Department to assist you in avoiding foreclosure, or visit the Department's Tips for Avoiding Foreclosure website at for additional assistance.'' (the blank space to be filled in by the loan servicer).

(a) Liability Established.--Any foreclosure consultant who fails to comply with any provision of section 702 or 703 with respect to any other person shall be liable to such person in an amount equal to the sum of the amounts determined under each of the following paragraphs:
(1) ACTUAL DAMAGES.--The greater of--
(A) the amount of any actual damage sustained by such person as a result of such failure; or
(B) any amount paid by the person to the foreclosure consultant.
(A) INDIVIDUAL ACTIONS.--In the case of any action by an individual, such amount (in addition to damages described in paragraph (1)) as the court may allow.
(B) CLASS ACTIONS.--In the case of a class action, the sum of--
(i) the aggregate of the amount which the court may allow for each named plaintiff; and
(ii) the aggregate of the amount which the court may allow for each other class member, without regard to any minimum individual recovery.
FEES.--In the case of any successful action to enforce any liability under paragraph (1) or (2), the costs of the action, together with reasonable attorneys' fees.

(b) Factors to Be Considered in Awarding Punitive Damages.--In determining the amount of any liability of any foreclosure consultant under subsection (a)(2), the court shall consider, among other relevant factors--
(1) the frequency and persistence of noncompliance by the foreclosure consultant;
(2) the nature of the noncompliance;
(3) the extent to which such noncompliance was intentional; and
(4) in the case of any class action, the number of consumers adversely affected.
(a) Enforcement by Federal Trade Commission.--
(1) UNFAIR OR DECEPTIVE ACT OR PRACTICE.--A violation of a prohibition described in section 702 or a failure to comply with any provision of section 702 or 703 shall be treated as a violation of a rule defining an unfair or deceptive act or practice described under section 18(a)(1)(B) of the Federal Trade Commission Act (15 U.S.C. 57a(a)(1)(B)).
(2) ACTIONS BY THE FEDERAL TRADE COMMISSION.--The Federal Trade Commission shall enforce the provisions of sections 702 and 703 in the same manner, by the same means, and with the same jurisdiction, powers, and duties as though all applicable terms and provisions of the Federal Trade Commission Act (15 U.S.C. 41 et seq.) were incorporated into and made part of this title.
(b) State Action for Violations.--
(1) AUTHORITY OF STATES.--In addition to such other remedies as are provided under State law, whenever the chief law enforcement officer of a State, or an official or agency designated by a State, has reason to believe that any person has violated or is violating the provisions of section 702 or 703, the State--
(A) may bring an action to enjoin such violation;
(B) may bring an action on behalf of its residents to recover damages for which the person is liable to such residents under section 704 as a result of the violation; and
(C) in the case of any successful action under subparagraph (A) or (B), shall be awarded the costs of the action and reasonable attorney fees, as determined by the court.
(A) NOTICE TO COMMISSION.--The State shall serve prior written notice of any civil action under paragraph (1) upon the Commission and provide the Commission with a copy of its complaint, except in any case in which such prior notice is not feasible, in which case the State shall serve such notice immediately upon instituting such action.
(B) INTERVENTION.--The Commission shall have the right--
(i) to intervene in any action referred to in subparagraph (A);
(ii) upon so intervening, to be heard on all matters arising in the action; and
(iii) to file petitions for appeal in such actions.
(3) INVESTIGATORY POWERS.--For purposes of bringing any action under this subsection, nothing in this subsection shall prevent the chief law enforcement officer, or an official or agency designated by a State, from exercising the powers conferred on the chief law enforcement officer or such official by the laws of such State to conduct investigations or to administer oaths or affirmations, or to compel the attendance of witnesses or the production of documentary and other evidence.
(4) LIMITATION.--Whenever the Federal Trade Commission has instituted a civil action for a violation of section 702 or 703, no State may, during the pendency of such action, bring an action under this section against any defendant named in the complaint of the Commission for any violation of section 702 or 703 that is alleged in that complaint.
Nothing in this title affects any provision of State or local law respecting any foreclosure consultant, residential mortgage loan, or residential real property that provides equal or greater protection to homeowners than what is provided under this title.

(As printed in the Congressional Record for the Senate on Apr 3, 2008.)