104 STAT. 4240 PUBLIC LAW 101-625—NOV. 28, 1990 "(E) REPORT. —The Secretary shall submit a report to the Congress not less than annually regarding the extent of compliance of creditors with the requirements of subparagraphs (A) and (B) and the effectiveness of the entity monitoring such compliance. The Secretary shall also include in the report any recommendations for legislative action to increase the authority of the Secretary to penalize creditors who do not comply with such requirements.", (c) PREPURCHASE AND FORECLOSURE-PREVENTION COUNSELING DEM- ONSTRATION. —Section 106 of the Housing and Urban Development Act of 1968 (12 U.S.C. 1701x) is amended by adding at the end the following new subsection: "(d) ftlEPURCHASE AND FORECLOSURE-PREVENTION COUNSELING DEMONSTRATION.— "(1) PURPOSES.— The purpose of this subsection is— "(A) to reduce defaults and foreclosures on mortgage loans insured under the Federal Housing Administration single family mortgage insurance program; "(B) to encourage responsible and prudent use of such federally insured home mortgsiges; "(C) to assist homeowners with such federally insured mortgages to retain the homes they have purchased pursuant to such mortgages; and "(D) to encourage the avedlability and expansion of housing opportunities in connection with such federally insured home mortgages. "(2) AUTHORITY.—The Secretary of Housing and Urban Development shall carry out a program to demonstrate the effectiveness of providing coordinated prepurchase counseling and foreclosure-prevention counseling to first-time homebuyers and homeowners in avoiding defaults and foreclosures on mortgages insured under the Federal Housing Administration single family home mortgage insurance program. "(3) GRANTS.— Under the demonstration program under this subsection, the Secretary shall make grants to qualified nonprofit organizations under paragraph (4) to enable the organizations to provide prepurchase counseling services to eligible homebuyers and foreclosure-prevention counseling services to eligible homeowners, in counseling target areas. (4) QuAUFiED NONPROFIT ORGANIZATIONS.—The Secretary shall select nonprofit organizations to receive assistance under the demonstration program under this subsection based on the experience and ability of the organizations in providing homeownership counseling and their ability to provide community-based prepurchase and foreclosure-prevention counseling under paragraphs (5) and (6) in a counseling target area. To be eligible for selection under this paragraph, a nonprofit organization shall submit an application containing a proposal for providing counseling services in the form and manner required by the Secretary. "(5) PREPURCHASE couNSEUNG.— "(A) MANDATORY PARTICIPATION.—Under the demonstration program, the Secretary shall require any eligible homebuyer who intends to purchase a home located in a counseling target area and who has applied for (as determined by the Secretary) a qualified mortage (as such term is defined in paragraph (10)(K)) on such home that involves
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