---
kind: "section"
citation: "15 U.S.C. § 1639b"
title: "15"
title_heading: "Commerce and Trade"
number: "1639b"
heading: "Residential mortgage loan origination"
release: "119-102"
date: "2026-07-12"
url: "https://uscodex.org/usc/15/1639b"
units:
  - "Chapter 41 — Consumer Credit Protection"
  - "Subchapter I — Consumer Credit Cost Disclosure"
  - "Part B — Credit Transactions"
---

# §1639b. Residential mortgage loan origination

- (a) **Finding and purpose—**
  - (1) **Finding—** The Congress finds that economic stabilization would be enhanced by the protection, limitation, and regulation of the terms of residential mortgage [credit](/usc/15/1602.md?p=f) and the practices related to such [credit](/usc/15/1602.md?p=f), while ensuring that responsible, affordable mortgage [credit](/usc/15/1602.md?p=f) remains available to [consumers](/usc/15/1681a.md?p=c).
  - (2) **Purpose—** It is the purpose of this section and [section 1639c of this title](/usc/15/1639c.md) to assure that [consumers](/usc/15/1681a.md?p=c) are offered and receive [residential mortgage loans](/usc/15/1602.md?p=dd-5) on terms that reasonably reflect their ability to repay the loans and that are understandable and not unfair, deceptive or abusive.
- (b) **Duty of care—**
  - (1) **Standard—** Subject to regulations prescribed under this subsection, each [mortgage originator](/usc/15/1602.md?p=dd-2) shall, in addition to the duties imposed by otherwise applicable provisions of [State](/usc/15/1602.md?p=s) or Federal law—
    - (A) be qualified and, when required, registered and licensed as a [mortgage originator](/usc/15/1602.md?p=dd-2) in accordance with applicable [State](/usc/15/1602.md?p=s) or Federal law, including the Secure and Fair Enforcement for Mortgage Licensing Act of 2008 [[12 U.S.C. 5101](/usc/12/5101.md) et seq.]; and
    - (B) include on all loan documents any unique identifier of the [mortgage originator](/usc/15/1602.md?p=dd-2) provided by the [Nationwide Mortgage Licensing System and Registry](/usc/15/1602.md?p=dd-3).
  - (2) **Compliance procedures required—** The [Bureau](/usc/15/1602.md?p=b) shall prescribe regulations requiring depository institutions to establish and maintain procedures reasonably designed to assure and monitor the compliance of such depository institutions, the subsidiaries of such institutions, and the employees of such institutions or subsidiaries with the requirements of this section and the registration procedures established under [section 1507](/usc/15/1507.md) of the Secure and Fair Enforcement for Mortgage Licensing Act of 2008 [[12 U.S.C. 5106](/usc/12/5106.md)].
- (c) **Prohibition on steering incentives—**
  - (1) **In general—** For any [residential mortgage loan](/usc/15/1602.md?p=dd-5), no [mortgage originator](/usc/15/1602.md?p=dd-2) shall receive from any [person](/usc/15/1602.md?p=e) and no [person](/usc/15/1602.md?p=e) shall pay to a [mortgage originator](/usc/15/1602.md?p=dd-2), directly or indirectly, compensation that varies based on the terms of the loan (other than the amount of the principal).
  - (2) **Restructuring of financing origination fee—**
    - (A) **In general—** For any mortgage loan, a [mortgage originator](/usc/15/1602.md?p=dd-2) may not receive from any [person](/usc/15/1602.md?p=e) other than the [consumer](/usc/15/1681a.md?p=c) and no [person](/usc/15/1602.md?p=e), other than the [consumer](/usc/15/1681a.md?p=c), who knows or has reason to know that a [consumer](/usc/15/1681a.md?p=c) has directly compensated or will directly compensate a [mortgage originator](/usc/15/1602.md?p=dd-2) may pay a [mortgage originator](/usc/15/1602.md?p=dd-2) any origination fee or charge except bona fide third party charges not retained by the [creditor](/usc/15/1602.md?p=g), [mortgage originator](/usc/15/1602.md?p=dd-2), or an affiliate of the [creditor](/usc/15/1602.md?p=g) or [mortgage originator](/usc/15/1602.md?p=dd-2).
    - (B) **Exception—** Notwithstanding [subparagraph (A)](#c-2-A), a [mortgage originator](/usc/15/1602.md?p=dd-2) may receive from a [person](/usc/15/1602.md?p=e) other than the [consumer](/usc/15/1681a.md?p=c) an origination fee or charge, and a [person](/usc/15/1602.md?p=e) other than the [consumer](/usc/15/1681a.md?p=c) may pay a [mortgage originator](/usc/15/1602.md?p=dd-2) an origination fee or charge, if—
      - (i) the [mortgage originator](/usc/15/1602.md?p=dd-2) does not receive any compensation directly from the [consumer](/usc/15/1681a.md?p=c); and
      - (ii) the [consumer](/usc/15/1681a.md?p=c) does not make an upfront payment of [discount](/usc/15/1602.md?p=q) points, origination points, or fees, however denominated (other than bona fide third party charges not retained by the [mortgage originator](/usc/15/1602.md?p=dd-2), [creditor](/usc/15/1602.md?p=g), or an affiliate of the [creditor](/usc/15/1602.md?p=g) or originator), except that the [Bureau](/usc/15/1602.md?p=b) may, by rule, waive or provide exemptions to this clause if the [Bureau](/usc/15/1602.md?p=b) determines that such waiver or exemption is in the interest of [consumers](/usc/15/1681a.md?p=c) and in the public interest.
  - (3) **Regulations—** The [Bureau](/usc/15/1602.md?p=b) shall prescribe regulations to prohibit—
    - (A) [mortgage originators](/usc/15/1602.md?p=dd-2) from steering any [consumer](/usc/15/1681a.md?p=c) to a [residential mortgage loan](/usc/15/1602.md?p=dd-5) that—
      - (i) the [consumer](/usc/15/1681a.md?p=c) lacks a reasonable ability to repay (in accordance with regulations prescribed under [section 1639c(a) of this title](/usc/15/1639c.md?p=a)); or
      - (ii) has predatory characteristics or effects (such as equity stripping, excessive fees, or abusive terms);
    - (B) [mortgage originators](/usc/15/1602.md?p=dd-2) from steering any [consumer](/usc/15/1681a.md?p=c) from a [residential mortgage loan](/usc/15/1602.md?p=dd-5) for which the [consumer](/usc/15/1681a.md?p=c) is qualified that is a qualified mortgage (as defined in [section 1639c(b)(2) of this title](/usc/15/1639c.md?p=b-2)) to a [residential mortgage loan](/usc/15/1602.md?p=dd-5) that is not a qualified mortgage;
    - (C) abusive or unfair lending practices that promote disparities among [consumers](/usc/15/1681a.md?p=c) of equal [credit](/usc/15/1602.md?p=f) worthiness but of different race, ethnicity, gender, or age; and
    - (D) [mortgage originators](/usc/15/1602.md?p=dd-2) from—
      - (i) mischaracterizing the [credit](/usc/15/1602.md?p=f) history of a [consumer](/usc/15/1681a.md?p=c) or the [residential mortgage loans](/usc/15/1602.md?p=dd-5) available to a [consumer](/usc/15/1681a.md?p=c);
      - (ii) mischaracterizing or suborning the mischaracterization of the appraised value of the property securing the extension of [credit](/usc/15/1602.md?p=f); or
      - (iii) if unable to suggest, offer, or recommend to a [consumer](/usc/15/1681a.md?p=c) a loan that is not more expensive than a loan for which the [consumer](/usc/15/1681a.md?p=c) qualifies, discouraging a [consumer](/usc/15/1681a.md?p=c) from seeking a [residential mortgage loan](/usc/15/1602.md?p=dd-5) secured by a [consumer](/usc/15/1681a.md?p=c)’s principal [dwelling](/usc/15/1602.md?p=w) from another [mortgage originator](/usc/15/1602.md?p=dd-2).
  - (4) **Rules of construction—** No provision of this subsection shall be construed as—
    - (A) permitting any yield spread premium or other similar compensation that would, for any [residential mortgage loan](/usc/15/1602.md?p=dd-5), permit the total amount of direct and indirect compensation from all sources permitted to a [mortgage originator](/usc/15/1602.md?p=dd-2) to vary based on the terms of the loan (other than the amount of the principal);
    - (B) limiting or affecting the amount of compensation received by a [creditor](/usc/15/1602.md?p=g) upon the sale of a consummated loan to a subsequent purchaser;
    - (C) restricting a [consumer](/usc/15/1681a.md?p=c)’s ability to finance, at the option of the [consumer](/usc/15/1681a.md?p=c), including through principal or rate, any origination fees or costs permitted under this subsection, or the [mortgage originator](/usc/15/1602.md?p=dd-2)’s right to receive such fees or costs (including compensation) from any [person](/usc/15/1602.md?p=e), subject to [paragraph (2)(B)](#c-2-B), so long as such fees or costs do not vary based on the terms of the loan (other than the amount of the principal) or the [consumer](/usc/15/1681a.md?p=c)’s decision about whether to finance such fees or costs; or
    - (D) prohibiting incentive payments to a [mortgage originator](/usc/15/1602.md?p=dd-2) based on the number of [residential mortgage loans](/usc/15/1602.md?p=dd-5) originated within a specified period of time.
- (d) **Liability for violations—**
  - (1) **In general—** For purposes of providing a cause of action for any failure by a [mortgage originator](/usc/15/1602.md?p=dd-2), other than a [creditor](/usc/15/1602.md?p=g), to comply with any requirement imposed under this section and any regulation prescribed under this section, [section 1640 of this title](/usc/15/1640.md) shall be applied with respect to any such failure by substituting “[mortgage originator](/usc/15/1602.md?p=dd-2)” for “[creditor](/usc/15/1602.md?p=g)” each place such term appears in each such subsection.[^1]
  - (2) **Maximum—** The maximum amount of any liability of a [mortgage originator](/usc/15/1602.md?p=dd-2) under [paragraph (1)](#d-1) to a [consumer](/usc/15/1681a.md?p=c) for any violation of this section shall not exceed the greater of actual damages or an amount equal to 3 times the total amount of direct and indirect compensation or gain accruing to the [mortgage originator](/usc/15/1602.md?p=dd-2) in connection with the [residential mortgage loan](/usc/15/1602.md?p=dd-5) involved in the violation, plus the costs to the [consumer](/usc/15/1681a.md?p=c) of the action, including a reasonable attorney’s fee.
- (e) **Discretionary regulatory authority—**
  - (1) **In general—** The [Bureau](/usc/15/1602.md?p=b) shall, by regulations, prohibit or condition terms, acts or practices relating to [residential mortgage loans](/usc/15/1602.md?p=dd-5) that the [Bureau](/usc/15/1602.md?p=b) finds to be abusive, unfair, deceptive, predatory, necessary or proper to ensure that responsible, affordable mortgage [credit](/usc/15/1602.md?p=f) remains available to [consumers](/usc/15/1681a.md?p=c) in a manner consistent with the purposes of this section and [section 1639c of this title](/usc/15/1639c.md), necessary or proper to effectuate the purposes of this section and [section 1639c of this title](/usc/15/1639c.md), to prevent circumvention or evasion thereof, or to facilitate compliance with such sections, or are not in the interest of the borrower.
  - (2) **Application—** The regulations prescribed under [paragraph (1)](#e-1) shall be applicable to all [residential mortgage loans](/usc/15/1602.md?p=dd-5) and shall be applied in the same manner as regulations prescribed under [section 1604 of this title](/usc/15/1604.md).
- (f) **Timeshare plans—** This section and any regulations promulgated thereunder do not apply to an extension of [credit](/usc/15/1602.md?p=f) relating to a plan described in section 101(53D) of title 11.

## Footnotes

[^1]: So in original. Probably should be “in such section.”

## Source credit

(Pub. L. 90–321, title I, § 129B, as added and amended Pub. L. 111–203, title X, § 1100A(2), title XIV, §§ 1402(a)(2), 1403–1405(a), July 21, 2010, 124 Stat. 2107, 2139–2141.)

## Notes

### Editorial Notes

### References in Text

The Secure and Fair Enforcement for Mortgage Licensing Act of 2008, referred to in subsec. (b)(1)(A), is title V of div. A of Pub. L. 110–289, July 30, 2008, 122 Stat. 2810, also known as the S.A.F.E. Mortgage Licensing Act of 2008, which is classified generally to chapter 51 (§ 5101 et seq.) of Title 12, Banks and Banking. For complete classification of this Act to the Code, see Short Title note set out under section 5101 of Title 12 and Tables.

### Amendments

2010—Pub. L. 111–203, § 1100A(2), substituted “Bureau” for “Board” wherever appearing.

Subsec. (c). Pub. L. 111–203, § 1403, added subsec. (c).

Subsec. (d). Pub. L. 111–203, § 1404, added subsec. (d).

Subsecs. (e), (f). Pub. L. 111–203, § 1405(a), added subsecs. (e) and (f).

### Effective Date of 2010 Amendment

Amendment by section 1100A(2) of Pub. L. 111–203 effective on the designated transfer date, see section 1100H of Pub. L. 111–203, set out as a note under section 552a of Title 5, Government Organization and Employees.

Amendment by sections 1403–1405(a) of Pub. L. 111–203 effective on the date on which final regulations implementing that amendment take effect, or on the date that is 18 months after the designated transfer date if such regulations have not been issued by that date, see section 1400(c) of Pub. L. 111–203, set out as a note under section 1601 of this title.

### Statutory Notes and Related Subsidiaries

### Effective Date

Section effective on the date on which final regulations implementing such section take effect, or on the date that is 18 months after the designated transfer date if such regulations have not been issued by that date, see section 1400(c) of Pub. L. 111–203, set out as an Effective Date of 2010 Amendment note under section 1601 of this title.

### Rule of Construction

Pub. L. 111–203, title XIV, § 1415, July 21, 2010, 124 Stat. 2153, provided that: “Except as otherwise expressly provided in section 129B or 129C of the Truth in Lending Act [15 U.S.C. 1639b, 1639c] (as added by this title), no provision of such section 129B or 129C shall be construed as superseding, repealing, or affecting any duty, right, obligation, privilege, or remedy of any person under any other provision of the Truth in Lending Act [15 U.S.C. 1601 et seq.] or any other provision of Federal or State law.”

[For definition of “State” as used in section 1415 of Pub. L. 111–203, set out above, see section 5301 of Title 12, Banks and Banking.]