article: SECTION 1. SHORT TITLE. This Act may be cited as the ``Consumer Protection Home Inspection Counseling Act of 2012''. SEC. 2. HOME INSPECTION COUNSELING. Section 1451 of the Dodd-Frank Wall Street Reform and Consumer Protection Act (12 U.S.C. 1701x-1) is amended-- (1) in subsection (b)-- (A) by striking the subsection designation and all that follows through ``Each'' and inserting the following: ``(b) Requirement for FHA-Approved Lenders.-- ``(1) Requirement.--Each''; and (B) by adding at the end the following new paragraph: ``(2) Effective date; mortgagee letter.--Not later than the expiration of the 90-day period beginning upon the date of the enactment of the Consumer Protection Home Inspection Counseling Act of 2012, the Secretary shall publish a Mortgagee Letter informing mortgagees of their obligation under paragraph (1).''; (2) in subsection (c)-- (A) by striking the subsection designation and all that follows through ``Each'' and inserting the following: ``(c) Requirements for HUD-Approved Counseling Agencies.-- ``(1) Provision of materials.--Each''; (B) by striking ``subparagraphs (C) and (D) of''; and (C) by adding at the end the following new paragraphs: ``(2) Requirements for housing counselors.--Each person providing counseling for a housing counseling entity authorized, certified, or funded in whole or in part under section 106 of the Housing and Urban Development Act of 1968 (12 U.S.C. 1701x) shall be trained through the voluntary home inspection training module established pursuant to subsection (d), shall distribute the counseling aids to be developed under this section, and shall explain the materials specified in subsection (a)(1) and other aids and materials set forth in this section. ``(3) Requirements for homeownership counseling programs.-- Any homeownership counseling program required under, or provided in connection with, any program administered by the Department of Housing and Urban Development shall be provided only by organizations or counselors certified by the Secretary pursuant to this section as competent to provide voluntary home inspection counseling. ``(4) Sanctions.--The Secretary may withhold, withdraw, or suspend housing counseling certifications for any housing counselor or counseling entity that fails to meet the requirements of this section.''; (3) in subsection (d)-- (A) in paragraph (3), by striking ``and'' at the end; (B) in paragraph (4), by striking the period at the end and inserting ``; and''; (C) by redesignating paragraphs (1) through (4) (as so amended) as subparagraphs (A) through (D), respectively, and realigning such subparagraphs (as so redesignated) so as to be indented 4 ems from the left margin; (D) by striking the subsection designation and all that follows through ``shall include--'' and inserting the following: ``(d) Training.-- ``(1) Establishment.--The Secretary shall establish a comprehensive program to train staff of the Department, contractors, individuals, and entities that provide housing counseling under programs authorized, certified, or funded under section 106 of the Housing and Urban Development Act of 1968 (12 U.S.C. 1701x) to also provide counseling to consumers on voluntary home inspection. ``(2) Requirements.--The training program established pursuant to this subsection shall include development of a training module to train counselors as well as counseling aids to be used by housing counselors and suitable for distribution to consumers. The training materials shall be written in plain language and shall be comprehensible to untrained consumers with or without ongoing assistance from housing counselors. Training provided under the program shall include--''; (E) in paragraph (2), as added by the amendment made by subparagraph (D) of this paragraph, by adding at the end the following new subparagraph: ``(E) Internet website references and information sufficient for counselors and homebuyers to locate and select a local professional home inspector.''; and (F) by adding at the end the following new paragraphs: ``(3) Content.--At a minimum, the home inspection counseling program established under this subsection, and the training module and counseling aids developed under this subsection, shall convey the following information: ``(A) That a home inspection in connection with purchase of a home is voluntary, but not mandatory, which means that the homebuyer must make a personal choice whether to obtain a home inspection. ``(B) That the Department of Housing and Urban Development recommends that homebuyers obtain a voluntary home inspection. ``(C) That a home inspection is an in-depth technical and objective examination of the physical structure and internal systems of the home, from the foundation to the roof, and should be performed by a trained and experienced professional home inspector. ``(D) That a home inspection is not required in the case of an FHA loan insured under title II of the National Housing Act (12 U.S.C. 1707 et seq.) and that a home inspection is not performed by FHA. ``(E) That in most cases, no home inspection will be performed unless the homebuyer requests one. ``(F) That it is the burden of the homebuyer to arrange for a home inspection if one is requested. ``(G) That an appraisal is not equivalent to a home inspection. ``(H) That if the homebuyer chooses to obtain a home inspection, it is generally to the homebuyer's benefit to do so as early as possible. ``(I) That the homebuyer may ask to make the transaction contingent on the outcome of the home inspection and that the homebuyer may realize substantial financial benefits from the home inspection, including from identifying possible repairs that could be performed and paid for by the seller prior to the closing. ``(J) That the homebuyer should consider requesting a voluntary home inspection. ``(4) Additional guidance materials.--The Secretary shall develop, in consultation with national professional home inspector associations, additional guidance materials to educate housing counselors on how to advise consumers how to locate, interview, and select a professional home inspector, and on how consumers may independently locate, interview, and select a professional home inspector. The Secretary shall require that these materials be made available to counselors providing housing counseling under the programs referred to in this section.''; and (4) by adding at the end the following new subsections: ``(e) Certification of Counselors.-- ``(1) Protocol.--The Secretary shall, in the discretion of the Secretary, develop a new independent protocol, or amend existing protocols, to certify that housing counselors whose activities are authorized, certified, or funded in whole or in part under section 106 of the Housing and Urban Development Act of 1968 (12 U.S.C. 1701x) have successfully completed training using the voluntary home inspection training module and counseling aids established and developed pursuant to this section. ``(2) Standards for materials and forms.--The Secretary shall establish standards and requirements for voluntary home inspection counseling materials and forms to be used, as appropriate, by organizations providing voluntary home inspection counseling. Such standards shall conform with the content requirements under this section. ``(f) Report.--Not later than the expiration of the 12-month period beginning upon the date of the enactment of the Consumer Protection Home Inspection Counseling Act of 2012, the Secretary shall submit a report to the Congress describing the actions that have been undertaken to comply with this section, disclosing the actions that are required under this section but have not at such time been addressed, assessing the results of this section that have been achieved at such time, identifying areas for improvement in the implementation of this section, and making recommendations to enhance implementation of this section.''.
summary: Consumer Protection Home Inspection Counseling Act of 2012 - Amends the Dodd-Frank Wall Street Reform and Consumer Protection Act to direct the Secretary of Housing and Urban Development (HUD) to publish a Mortgagee Letter informing mortgagees of their obligation to provide prospective homebuyers with specified HUD public outreach publications concerning the importance of obtaining independent home inspections. Requires persons providing housing counseling for HUD-approved counseling agencies to: (1) be trained through a certain voluntary home inspection training module, and (2) distribute and explain certain counseling aids. Requires any homeownership counseling program under HUD auspices or administration to be provided only by organizations or counselors HUD-certified as competent to provide voluntary home inspection counseling. Authorizes HUD to withhold, withdraw, or suspend housing counseling certifications for any non-compliant housing counselor or counseling entity. Requires HUD to establish a comprehensive program to train HUD staff, contractors, individuals, and entities that provide housing counseling under specified HUD-funded programs also to provide counseling to consumers on voluntary home inspection. Requires such training program to include development of a training module to: (1) train counselors as well as counseling aids for use by housing counselors and suitable for distribution to consumers; and (2) be comprehensible to untrained consumers with or without ongoing assistance from housing counselors. Requires HUD, at the Secretary's discretion, to develop a new independent protocol, or amend existing protocols, to certify that such housing counselors have successfully completed training using the voluntary home inspection training module and counseling aids established under this Act.