To improve upon certain provisions of the Truth in Lending Act related to the compensation of mortgage originators, and for other purposes.
Be it enacted by the Senate and House of Representatives of the United States of America in Congress assembled,
SECTION 1. SHORT TITLE.
This Act may be cited as the ``Preserving Consumers' Mortgage Origination Choices Act of 2011''.
SEC. 2. COMPENSATION OF MORTGAGE ORIGINATORS BY MORTGAGE BROKERS.
Subsection (c)(4) of section 129B of the Truth in Lending Act (as added by Public Law 111-203) is amended by adding at the end the following new subparagraph: ``(E) prohibiting a mortgage broker from compensating a mortgage originator based on the principal amount of the loan, when compensation is paid directly or indirectly to the mortgage broker by the consumer in connection with such transaction.''.
SEC. 3. LIMITED REDUCTION IN MORTGAGE ORIGINATOR COMPENSATION.
Section 129B of such Act is amended-- (1) by redesigning subsections (d), (e), and (f) as subsections (e), (f), and (g), respectively; and (2) by inserting after subsection (c) the following new subsection: ``(d) Limited Reduction in Mortgage Originator Compensation.--When producing a mortgage, a mortgage originator, when requested by a borrower, may forfeit or contribute toward bona fide third party expenses or origination fees no more than 30 percent of earned compensation to avoid making a high-cost mortgage to a consumer, to make technical corrections, or for any other reason that results in a lower cost to the consumer than if such forfeiture or contribution did not take...