-CITE-
    12 USC CHAPTER 49 - HOMEOWNERS PROTECTION                   01/03/2007

-EXPCITE-
    TITLE 12 - BANKS AND BANKING
    CHAPTER 49 - HOMEOWNERS PROTECTION

-HEAD-
                    CHAPTER 49 - HOMEOWNERS PROTECTION                

-MISC1-
    Sec.                                                     
    4901.       Definitions.                                          
    4902.       Termination of private mortgage insurance.            
    4903.       Disclosure requirements.                              
    4904.       Notification upon cancellation or termination.        
    4905.       Disclosure requirements for lender paid mortgage
                 insurance.                                           
    4906.       Fees for disclosures.                                 
    4907.       Civil liability.                                      
    4908.       Effect on other laws and agreements.                  
    4909.       Enforcement.                                          
    4910.       Construction.                                         

-End-



-CITE-
    12 USC Sec. 4901                                            01/03/2007

-EXPCITE-
    TITLE 12 - BANKS AND BANKING
    CHAPTER 49 - HOMEOWNERS PROTECTION

-HEAD-
    Sec. 4901. Definitions

-STATUTE-
      In this chapter, the following definitions shall apply:
      (1) Adjustable rate mortgage
        The term "adjustable rate mortgage" means a residential
      mortgage that has an interest rate that is subject to change. A
      residential mortgage that: (A) does not fully amortize over the
      term of the obligation; and (B) contains a conditional right to
      refinance or modify the unamortized principal at the maturity
      date of the term, shall be considered to be an adjustable rate
      mortgage for purposes of this chapter.
      (2) Cancellation date
        The term "cancellation date" means - 
          (A) with respect to a fixed rate mortgage, at the option of
        the mortgagor, the date on which the principal balance of the
        mortgage - 
            (i) based solely on the initial amortization schedule for
          that mortgage, and irrespective of the outstanding balance
          for that mortgage on that date, is first scheduled to reach
          80 percent of the original value of the property securing the
          loan; or
            (ii) based solely on actual payments, reaches 80 percent of
          the original value of the property securing the loan; and

          (B) with respect to an adjustable rate mortgage, at the
        option of the mortgagor, the date on which the principal
        balance of the mortgage - 
            (i) based solely on the amortization schedule then in
          effect for that mortgage, and irrespective of the outstanding
          balance for that mortgage on that date, is first scheduled to
          reach 80 percent of the original value of the property
          securing the loan; or
            (ii) based solely on actual payments, first reaches 80
          percent of the original value of the property securing the
          loan.
      (3) Fixed rate mortgage
        The term "fixed rate mortgage" means a residential mortgage
      that has an interest rate that is not subject to change.
      (4) Good payment history
        The term "good payment history" means, with respect to a
      mortgagor, that the mortgagor has not - 
          (A) made a mortgage payment that was 60 days or longer past
        due during the 12-month period beginning 24 months before the
        later of (i) the date on which the mortgage reaches the
        cancellation date, or (ii) the date that the mortgagor submits
        a request for cancellation under section 4902(a)(1) of this
        title; or
          (B) made a mortgage payment that was 30 days or longer past
        due during the 12-month period preceding the later of (i) the
        date on which the mortgage reaches the cancellation date, or
        (ii) the date that the mortgagor submits a request for
        cancellation under section 4902(a)(1) of this title.
      (5) Initial amortization schedule
        The term "initial amortization schedule" means a schedule
      established at the time at which a residential mortgage
      transaction is consummated with respect to a fixed rate mortgage,
      showing - 
          (A) the amount of principal and interest that is due at
        regular intervals to retire the principal balance and accrued
        interest over the amortization period of the loan; and
          (B) the unpaid principal balance of the loan after each
        scheduled payment is made.
      (6) Amortization schedule then in effect
        The term "amortization schedule then in effect" means, with
      respect to an adjustable rate mortgage, a schedule established at
      the time at which the residential mortgage transaction is
      consummated or, if such schedule has been changed or
      recalculated, is the most recent schedule under the terms of the
      note or mortgage, which shows - 
          (A) the amount of principal and interest that is due at
        regular intervals to retire the principal balance and accrued
        interest over the remaining amortization period of the loan;
        and
          (B) the unpaid balance of the loan after each such scheduled
        payment is made.
      (7) Midpoint of the amortization period
        The term "midpoint of the amortization period" means, with
      respect to a residential mortgage transaction, the point in time
      that is halfway through the period that begins upon the first day
      of the amortization period established at the time a residential
      mortgage transaction is consummated and ends upon the completion
      of the entire period over which the mortgage is scheduled to be
      amortized.
      (8) Mortgage insurance
        The term "mortgage insurance" means insurance, including any
      mortgage guaranty insurance, against the nonpayment of, or
      default on, an individual mortgage or loan involved in a
      residential mortgage transaction.
      (9) Mortgage insurer
        The term "mortgage insurer" means a provider of private
      mortgage insurance, as described in this chapter, that is
      authorized to transact such business in the State in which the
      provider is transacting such business.
      (10) Mortgagee
        The term "mortgagee" means the holder of a residential mortgage
      at the time at which that mortgage transaction is consummated.
      (11) Mortgagor
        The term "mortgagor" means the original borrower under a
      residential mortgage or his or her successors or assignees.
      (12) Original value
        The term "original value", with respect to a residential
      mortgage transaction, means the lesser of the sales price of the
      property securing the mortgage, as reflected in the contract, or
      the appraised value at the time at which the subject residential
      mortgage transaction was consummated. In the case of a
      residential mortgage transaction for refinancing the principal
      residence of the mortgagor, such term means only the appraised
      value relied upon by the mortgagee to approve the refinance
      transaction.
      (13) Private mortgage insurance
        The term "private mortgage insurance" means mortgage insurance
      other than mortgage insurance made available under the National
      Housing Act [12 U.S.C. 1701 et seq.], title 38, or title V of the
      Housing Act of 1949 [42 U.S.C. 1471 et seq.].
      (14) Residential mortgage
        The term "residential mortgage" means a mortgage, loan, or
      other evidence of a security interest created with respect to a
      single-family dwelling that is the principal residence of the
      mortgagor.
      (15) Residential mortgage transaction
        The term "residential mortgage transaction" means a transaction
      consummated on or after the date that is 1 year after July 29,
      1998, in which a mortgage, deed of trust, purchase money security
      interest arising under an installment sales contract, or
      equivalent consensual security interest is created or retained
      against a single-family dwelling that is the principal residence
      of the mortgagor to finance the acquisition, initial
      construction, or refinancing of that dwelling.
      (16) Servicer
        The term "servicer" has the same meaning as in section
      2605(i)(2) of this title, with respect to a residential mortgage.
      (17) Single-family dwelling
        The term "single-family dwelling" means a residence consisting
      of 1 family dwelling unit.
      (18) Termination date
        The term "termination date" means - 
          (A) with respect to a fixed rate mortgage, the date on which
        the principal balance of the mortgage, based solely on the
        initial amortization schedule for that mortgage, and
        irrespective of the outstanding balance for that mortgage on
        that date, is first scheduled to reach 78 percent of the
        original value of the property securing the loan; and
          (B) with respect to an adjustable rate mortgage, the date on
        which the principal balance of the mortgage, based solely on
        the amortization schedule then in effect for that mortgage, and
        irrespective of the outstanding balance for that mortgage on
        that date, is first scheduled to reach 78 percent of the
        original value of the property securing the loan.

-SOURCE-
    (Pub. L. 105-216, Sec. 2, July 29, 1998, 112 Stat. 897; Pub. L. 106-
    569, title IV, Secs. 402(a)(1), (b), 405(a), 406(b)-(d), Dec. 27,
    2000, 114 Stat. 2956, 2958, 2959.)

-REFTEXT-
                            REFERENCES IN TEXT                        
      This chapter, referred to in text, was in the original "this
    Act", meaning Pub. L. 105-216, July 29, 1998, 112 Stat. 897, known
    as the Homeowners Protection Act of 1998. For complete
    classification of this Act to the Code, see Short Title note below
    and Tables.
      The National Housing Act, referred to in par. (13), is act June
    27, 1934, ch. 847, 48 Stat. 1246, as amended, which is classified
    principally to chapter 13 (Sec. 1701 et seq.) of this title. For
    complete classification of this Act to the Code, see section 1701
    of this title and Tables.
      The Housing Act of 1949, referred to in par. (13), is act July
    15, 1949, ch. 338, 63 Stat. 413, as amended. Title V of the Act is
    classified generally to subchapter III (Sec. 1471 et seq.) of
    chapter 8A of Title 42, The Public Health and Welfare. For complete
    classification of this Act to the Code, see Short Title note set
    out under section 1441 of Title 42 and Tables.


-MISC1-
                                AMENDMENTS                            
      2000 - Par. (1). Pub. L. 106-569, Sec. 402(b), inserted at end "A
    residential mortgage that: (A) does not fully amortize over the
    term of the obligation; and (B) contains a conditional right to
    refinance or modify the unamortized principal at the maturity date
    of the term, shall be considered to be an adjustable rate mortgage
    for purposes of this chapter."
      Par. (2)(B)(i). Pub. L. 106-569, Sec. 402(a)(1)(A), substituted
    "the amortization schedule then in effect" for "amortization
    schedules".
      Par. (4)(A). Pub. L. 106-569, Sec. 405(a)(1), inserted "the later
    of (i)" before "the date on which the mortgage" and ", or (ii) the
    date that the mortgagor submits a request for cancellation under
    section 4902(a)(1) of this title" before the semicolon.
      Par. (4)(B). Pub. L. 106-569, Sec. 405(a)(2), inserted "the later
    of (i)" before "the date on which the mortgage" and ", or (ii) the
    date that the mortgagor submits a request for cancellation under
    section 4902(a)(1) of this title" before period at end.
      Par. (6). Pub. L. 106-569, Sec. 402(a)(1)(D), added par. (6).
    Former par. (6) redesignated (8).
      Par. (7). Pub. L. 106-569, Sec. 406(b), added par. (7). Former
    par. (7) redesignated (9).
      Pars. (8) to (11). Pub. L. 106-569, Sec. 402(a)(1)(C),
    redesignated pars. (6) to (9) as (8) to (11), respectively. Former
    pars. (10) and (11) redesignated (12) and (13), respectively.
      Par. (12). Pub. L. 106-569, Sec. 406(c), inserted "transaction"
    after "a residential mortgage" and inserted at end "In the case of
    a residential mortgage transaction for refinancing the principal
    residence of the mortgagor, such term means only the appraised
    value relied upon by the mortgagee to approve the refinance
    transaction."
      Pub. L. 106-569, Sec. 402(a)(1)(C), redesignated par. (10) as
    (12). Former par. (12) redesignated (14).
      Par. (13). Pub. L. 106-569, Sec. 402(a)(1)(C), redesignated par.
    (11) as (13). Former par. (13) redesignated (15).
      Par. (14). Pub. L. 106-569, Sec. 406(d)(1), substituted
    "principal residence of the mortgagor" for "primary residence of
    the mortgagor".
      Pub. L. 106-569, Sec. 402(a)(1)(C), redesignated par. (12) as
    (14). Former par. (14) redesignated (16).
      Par. (15). Pub. L. 106-569, Sec. 406(d)(2), substituted
    "principal residence of the mortgagor" for "primary residence of
    the mortgagor".
      Pub. L. 106-569, Sec. 402(a)(1)(C), redesignated par. (13) as
    (15). Former par. (15) redesignated (17).
      Par. (16). Pub. L. 106-569, Sec. 402(a)(1)(C), redesignated par.
    (14) as (16). Former par. (16) redesignated (18).
      Par. (16)(B). Pub. L. 106-569, Sec. 402(a)(1)(B), substituted
    "the amortization schedule then in effect" for "amortization
    schedules".
      Pars. (17), (18). Pub. L. 106-569, Sec. 402(a)(1)(C),
    redesignated pars. (15) and (16) as (17) and (18), respectively.

                              EFFECTIVE DATE                          
      Pub. L. 105-216, Sec. 13, July 29, 1998, 112 Stat. 908, provided
    that: "This Act [enacting this chapter and amending section 1088 of
    Title 20, Education], other than section 14 [enacting provisions
    set out as notes under sections 1441a and 1831q of this title and
    amending provisions set out as a note under section 1831q of this
    title], shall become effective 1 year after the date of enactment
    of this Act [July 29, 1998]."

                       SHORT TITLE OF 2000 AMENDMENT                   
      Pub. L. 106-569, title IV, Sec. 401, Dec. 27, 2000, 114 Stat.
    2956, provided that: "This title [amending this section and
    sections 4902, 4903, and 4905 of this title] may be cited as the
    'Private Mortgage Insurance Technical Corrections and Clarification
    Act'."

                                SHORT TITLE                            
      Pub. L. 105-216, Sec. 1(a), July 29, 1998, 112 Stat. 897,
    provided that: "This Act [enacting this chapter, amending section
    1088 of Title 20, Education, enacting provisions set out as notes
    under sections 1441a and 1831q of this title, and amending
    provisions set out as a note under section 1831q of this title] may
    be cited as the 'Homeowners Protection Act of 1998'."

-End-



-CITE-
    12 USC Sec. 4902                                            01/03/2007

-EXPCITE-
    TITLE 12 - BANKS AND BANKING
    CHAPTER 49 - HOMEOWNERS PROTECTION

-HEAD-
    Sec. 4902. Termination of private mortgage insurance

-STATUTE-
    (a) Borrower cancellation
      A requirement for private mortgage insurance in connection with a
    residential mortgage transaction shall be canceled on the
    cancellation date or any later date that the mortgagor fulfills all
    of the requirements under paragraphs (1) through (4), if the
    mortgagor - 
        (1) submits a request in writing to the servicer that
      cancellation be initiated;
        (2) has a good payment history with respect to the residential
      mortgage;
        (3) is current on the payments required by the terms of the
      residential mortgage transaction; and
        (4) has satisfied any requirement of the holder of the mortgage
      (as of the date of a request under paragraph (1)) for - 
          (A) evidence (of a type established in advance and made known
        to the mortgagor by the servicer promptly upon receipt of a
        request under paragraph (1)) that the value of the property
        securing the mortgage has not declined below the original value
        of the property; and
          (B) certification that the equity of the mortgagor in the
        residence securing the mortgage is unencumbered by a
        subordinate lien.
    (b) Automatic termination
      A requirement for private mortgage insurance in connection with a
    residential mortgage transaction shall terminate with respect to
    payments for that mortgage insurance made by the mortgagor - 
        (1) on the termination date if, on that date, the mortgagor is
      current on the payments required by the terms of the residential
      mortgage transaction; or
        (2) if the mortgagor is not current on the termination date, on
      the first day of the first month beginning after the date that
      the mortgagor becomes current on the payments required by the
      terms of the residential mortgage transaction.
    (c) Final termination
      If a requirement for private mortgage insurance is not otherwise
    canceled or terminated in accordance with subsection (a) or (b) of
    this section, in no case may such a requirement be imposed on
    residential mortgage transactions beyond the first day of the month
    immediately following the date that is the midpoint of the
    amortization period of the loan if the mortgagor is current on the
    payments required by the terms of the mortgage.
    (d) Treatment of loan modifications
      If a mortgagor and mortgagee (or holder of the mortgage) agree to
    a modification of the terms or conditions of a loan pursuant to a
    residential mortgage transaction, the cancellation date,
    termination date, or final termination shall be recalculated to
    reflect the modified terms and conditions of such loan.
    (e) No further payments
      No payments or premiums may be required from the mortgagor in
    connection with a private mortgage insurance requirement terminated
    or canceled under this section - 
        (1) in the case of cancellation under subsection (a) of this
      section, more than 30 days after the later of - 
          (A) the date on which a request under subsection (a)(1) of
        this section is received; or
          (B) the date on which the mortgagor satisfies any evidence
        and certification requirements under subsection (a)(4) of this
        section;

        (2) in the case of termination under subsection (b) of this
      section, more than 30 days after the termination date or the date
      referred to in subsection (b)(2) of this section, as applicable;
      and
        (3) in the case of termination under subsection (c) of this
      section, more than 30 days after the final termination date
      established under that subsection.
    (f) Return of unearned premiums
      (1) In general
        Not later than 45 days after the termination or cancellation of
      a private mortgage insurance requirement under this section, all
      unearned premiums for private mortgage insurance shall be
      returned to the mortgagor by the servicer.
      (2) Transfer of funds to servicer
        Not later than 30 days after notification by the servicer of
      termination or cancellation of private mortgage insurance under
      this chapter with respect to a mortgagor, a mortgage insurer that
      is in possession of any unearned premiums of that mortgagor shall
      transfer to the servicer of the subject mortgage an amount equal
      to the amount of the unearned premiums for repayment in
      accordance with paragraph (1).
    (g) Exceptions for high risk loans
      (1) In general
        The termination and cancellation provisions in subsections (a)
      and (b) of this section do not apply to any residential mortgage
      transaction that, at the time at which the residential mortgage
      transaction is consummated, has high risks associated with the
      extension of the loan - 
          (A) as determined in accordance with guidelines published by
        the Federal National Mortgage Association and the Federal Home
        Loan Mortgage Corporation, in the case of a mortgage loan with
        an original principal balance that does not exceed the
        applicable annual conforming loan limit for the secondary
        market established pursuant to section 1454(a)(2) of this
        title, so as to require the imposition or continuation of a
        private mortgage insurance requirement beyond the terms
        specified in subsection (a) or (b) of this section; or
          (B) as determined by the mortgagee in the case of any other
        mortgage, except that termination shall occur - 
            (i) with respect to a fixed rate mortgage, on the date on
          which the principal balance of the mortgage, based solely on
          the initial amortization schedule for that mortgage, and
          irrespective of the outstanding balance for that mortgage on
          that date, is first scheduled to reach 77 percent of the
          original value of the property securing the loan; and
            (ii) with respect to an adjustable rate mortgage, on the
          date on which the principal balance of the mortgage, based
          solely on the amortization schedule then in effect for that
          mortgage, and irrespective of the outstanding balance for
          that mortgage on that date, is first scheduled to reach 77
          percent of the original value of the property securing the
          loan.
      (2) Termination at midpoint
        A private mortgage insurance requirement in connection with a
      residential mortgage transaction described in paragraph (1) shall
      terminate in accordance with subsection (c) of this section.
      (3) Rule of construction
        Nothing in this subsection may be construed to require a
      residential mortgage or residential mortgage transaction
      described in paragraph (1)(A) to be purchased by the Federal
      National Mortgage Association or the Federal Home Loan Mortgage
      Corporation.
      (4) GAO report
        Not later than 2 years after July 29, 1998, the Comptroller
      General of the United States shall submit to the Congress a
      report describing the volume and characteristics of residential
      mortgages and residential mortgage transactions that, pursuant to
      paragraph (1) of this subsection, are exempt from the application
      of subsections (a) and (b) of this section. The report shall - 
          (A) determine the number or volume of such mortgages and
        transactions compared to residential mortgages and residential
        mortgage transactions that are not classified as high-risk for
        purposes of paragraph (1); and
          (B) identify the characteristics of such mortgages and
        transactions that result in their classification (for purposes
        of paragraph (1)) as having high risks associated with the
        extension of the loan and describe such characteristics,
        including - 
            (i) the income levels and races of the mortgagors involved;
            (ii) the amount of the downpayments involved and the
          downpayments expressed as percentages of the acquisition
          costs of the properties involved;
            (iii) the types and locations of the properties involved;
            (iv) the mortgage principal amounts; and
            (v) any other characteristics of such mortgages and
          transactions that may contribute to their classification as
          high risk for purposes of paragraph (1), including whether
          such mortgages are purchase-money mortgages or refinancings
          and whether and to what extent such loans are low-
          documentation loans.
    (h) Accrued obligation for premium payments
      The cancellation or termination under this section of the private
    mortgage insurance of a mortgagor shall not affect the rights of
    any mortgagee, servicer, or mortgage insurer to enforce any
    obligation of such mortgagor for premium payments accrued prior to
    the date on which such cancellation or termination occurred.

-SOURCE-
    (Pub. L. 105-216, Sec. 3, July 29, 1998, 112 Stat. 899; Pub. L. 106-
    569, title IV, Secs. 402(a)(2), (c)(1), 403(a), 404, 405(b), (c),
    Dec. 27, 2000, 114 Stat. 2956-2958.)


-MISC1-
                                AMENDMENTS                            
      2000 - Subsec. (a). Pub. L. 106-569, Sec. 404(1)(A), inserted "or
    any later date that the mortgagor fulfills all of the requirements
    under paragraphs (1) through (4)" after "cancellation date" in
    introductory provisions.
      Subsec. (a)(3), (4). Pub. L. 106-569, Sec. 404(1)(B)-(D), added
    par. (3) and redesignated former par. (3) as (4).
      Subsec. (b)(2). Pub. L. 106-569, Sec. 405(b), amended par. (2)
    generally. Prior to amendment, par. (2) read as follows: "on the
    date after the termination date on which the mortgagor becomes
    current on the payments required by the terms of the residential
    mortgage transaction."
      Subsec. (c). Pub. L. 106-569, Sec. 403(a)(1), inserted "on
    residential mortgage transactions" after "requirement be imposed".
      Subsec. (d). Pub. L. 106-569, Sec. 402(c)(1)(B), added subsec.
    (d). Former subsec. (d) redesignated (e).
      Subsec. (e). Pub. L. 106-569, Sec. 402(c)(1)(A), redesignated
    subsec. (d) as (e). Former subsec. (e) redesignated (f).
      Subsec. (e)(1)(B). Pub. L. 106-569, Sec. 404(2), substituted
    "subsection (a)(4) of this section" for "subsection (a)(3) of this
    section".
      Subsec. (f). Pub. L. 106-569, Sec. 402(c)(1)(A), redesignated
    subsec. (e) as (f). Former subsec. (f) redesignated (g).
      Subsec. (f)(1)(B)(ii). Pub. L. 106-569, Sec. 402(a)(2),
    substituted "the amortization schedule then in effect" for
    "amortization schedules".
      Subsec. (g). Pub. L. 106-569, Sec. 402(c)(1)(A), redesignated
    subsec. (f) as (g).
      Subsec. (g)(1). Pub. L. 106-569, Sec. 403(a)(2)(A), struck out
    "mortgage or" after "do not apply to any residential" in
    introductory provisions.
      Subsec. (g)(2). Pub. L. 106-569, Sec. 403(a)(2)(B), struck out
    "mortgage or" after "in connection with a residential".
      Subsec. (g)(3). Pub. L. 106-569, Sec. 403(a)(2)(C), substituted
    "residential mortgage or residential" for "mortgage or".
      Subsec. (h). Pub. L. 106-569, Sec. 405(c), added subsec. (h).

-End-



-CITE-
    12 USC Sec. 4903                                            01/03/2007

-EXPCITE-
    TITLE 12 - BANKS AND BANKING
    CHAPTER 49 - HOMEOWNERS PROTECTION

-HEAD-
    Sec. 4903. Disclosure requirements

-STATUTE-
    (a) Disclosures for new mortgages at time of transaction
      (1) Disclosures for non-exempted transactions
        In any case in which private mortgage insurance is required in
      connection with a residential mortgage transaction (other than a
      residential mortgage transaction described in section 4902(g)(1)
      of this title), at the time at which the transaction is
      consummated, the mortgagee shall provide to the mortgagor - 
          (A) if the transaction relates to a fixed rate mortgage - 
            (i) a written initial amortization schedule; and
            (ii) written notice - 
              (I) that the mortgagor may cancel the requirement in
            accordance with section 4902(a) of this title indicating
            the date on which the mortgagor may request cancellation,
            based solely on the initial amortization schedule;
              (II) that the mortgagor may request cancellation in
            accordance with section 4902(a) of this title earlier than
            provided for in the initial amortization schedule, based on
            actual payments;
              (III) that the requirement for private mortgage insurance
            will automatically terminate on the termination date in
            accordance with section 4902(b) of this title, and what
            that termination date is with respect to that mortgage; and
              (IV) that there are exemptions to the right to
            cancellation and automatic termination of a requirement for
            private mortgage insurance in accordance with section
            4902(g) of this title, and whether such an exemption
            applies at that time to that transaction; and

          (B) if the transaction relates to an adjustable rate
        mortgage, a written notice that - 
            (i) the mortgagor may cancel the requirement in accordance
          with section 4902(a) of this title on the cancellation date,
          and that the servicer will notify the mortgagor when the
          cancellation date is reached;
            (ii) the requirement for private mortgage insurance will
          automatically terminate on the termination date, and that on
          the termination date, the mortgagor will be notified of the
          termination or that the requirement will be terminated as
          soon as the mortgagor is current on loan payments; and
            (iii) there are exemptions to the right of cancellation and
          automatic termination of a requirement for private mortgage
          insurance in accordance with section 4902(g) of this title,
          and whether such an exemption applies at that time to that
          transaction.
      (2) Disclosures for excepted transactions
        In the case of a residential mortgage transaction described in
      section 4902(g)(1) of this title, at the time at which the
      transaction is consummated, the mortgagee shall provide written
      notice to the mortgagor that in no case may private mortgage
      insurance be required beyond the date that is the midpoint of the
      amortization period of the loan, if the mortgagor is current on
      payments required by the terms of the residential mortgage.
      (3) Annual disclosures
        If private mortgage insurance is required in connection with a
      residential mortgage transaction, the servicer shall disclose to
      the mortgagor in each such transaction in an annual written
      statement - 
          (A) the rights of the mortgagor under this chapter to
        cancellation or termination of the private mortgage insurance
        requirement; and
          (B) an address and telephone number that the mortgagor may
        use to contact the servicer to determine whether the mortgagor
        may cancel the private mortgage insurance.
      (4) Applicability
        Paragraphs (1) through (3) shall apply with respect to each
      residential mortgage transaction consummated on or after the date
      that is 1 year after July 29, 1998.
    (b) Disclosures for existing mortgages
      If private mortgage insurance was required in connection with a
    residential mortgage entered into at any time before the effective
    date of this chapter, the servicer shall disclose to the mortgagor
    in each such transaction in an annual written statement - 
        (1) that the private mortgage insurance may, under certain
      circumstances, be canceled by the mortgagor (with the consent of
      the mortgagee or in accordance with applicable State law); and
        (2) an address and telephone number that the mortgagor may use
      to contact the servicer to determine whether the mortgagor may
      cancel the private mortgage insurance.
    (c) Inclusion in other annual notices
      The information and disclosures required under subsection (b) of
    this section and subsection (a)(3) of this section may be provided
    on the annual disclosure relating to the escrow account made as
    required under the Real Estate Settlement Procedures Act of 1974
    [12 U.S.C. 2601 et seq.], or as part of the annual disclosure of
    interest payments made pursuant to Internal Revenue Service
    regulations, and on a form promulgated by the Internal Revenue
    Service for that purpose.
    (d) Standardized forms
      The mortgagee or servicer may use standardized forms for the
    provision of disclosures required under this section, which
    disclosures shall relate to the mortgagor's rights under this
    chapter.

-SOURCE-
    (Pub. L. 105-216, Sec. 4, July 29, 1998, 112 Stat. 902; Pub. L. 106-
    569, title IV, Secs. 402(c)(2), 403(b), Dec. 27, 2000, 114 Stat.
    2957.)

-REFTEXT-
                            REFERENCES IN TEXT                        
      The effective date of this chapter, referred to in subsec. (b),
    is 1 year after July 29, 1998, see section 13 of Pub. L. 105-216,
    set out as an Effective Date note under section 4901 of this title.
      The Real Estate Settlement Procedures Act of 1974, referred to in
    subsec. (c), is Pub. L. 93-533, Dec. 22, 1974, 88 Stat. 1724, as
    amended, which is classified principally to chapter 27 (Sec. 2601
    et seq.) of this title. For complete classification of this Act to
    the Code, see Short Title note set out under section 2601 of this
    title and Tables.


-MISC1-
                                AMENDMENTS                            
      2000 - Subsec. (a)(1). Pub. L. 106-569, Secs. 402(c)(2)(A)(i),
    403(b)(1)(A), substituted "residential mortgage transaction (other
    than a residential mortgage transaction described in section
    4902(g)(1) of this title)" for "residential mortgage or mortgage
    transaction (other than a mortgage or mortgage transaction
    described in section 4902(f)(1) of this title)" in introductory
    provisions.
      Subsec. (a)(1)(A)(ii)(IV), (B)(iii). Pub. L. 106-569, Sec.
    402(c)(2)(A)(ii), (iii), substituted "section 4902(g) of this
    title" for "section 4902(f) of this title".
      Subsec. (a)(2). Pub. L. 106-569, Secs. 402(c)(2)(B),
    403(b)(1)(B), substituted "residential mortgage transaction" for
    "mortgage or mortgage transaction" and "section 4902(g)(1) of this
    title" for "section 4902(f)(1) of this title".
      Subsec. (c). Pub. L. 106-569, Sec. 403(b)(2), substituted
    "subsection (a)(3) of this section" for "paragraphs (1)(B) and (3)
    of subsection (a) of this section".
      Subsec. (d). Pub. L. 106-569, Sec. 403(b)(3), inserted before
    period at end ", which disclosures shall relate to the mortgagor's
    rights under this chapter".

-End-



-CITE-
    12 USC Sec. 4904                                            01/03/2007

-EXPCITE-
    TITLE 12 - BANKS AND BANKING
    CHAPTER 49 - HOMEOWNERS PROTECTION

-HEAD-
    Sec. 4904. Notification upon cancellation or termination

-STATUTE-
    (a) In general
      Not later than 30 days after the date of cancellation or
    termination of a private mortgage insurance requirement in
    accordance with this chapter, the servicer shall notify the
    mortgagor in writing - 
        (1) that the private mortgage insurance has terminated and that
      the mortgagor no longer has private mortgage insurance; and
        (2) that no further premiums, payments, or other fees shall be
      due or payable by the mortgagor in connection with the private
      mortgage insurance.
    (b) Notice of grounds
      (1) In general
        If a servicer determines that a mortgage did not meet the
      requirements for termination or cancellation of private mortgage
      insurance under subsection (a) or (b) of section 4902 of this
      title, the servicer shall provide written notice to the mortgagor
      of the grounds relied on to make the determination (including the
      results of any appraisal used to make the determination).
      (2) Timing
        Notice required by paragraph (1) shall be provided - 
          (A) with respect to cancellation of private mortgage
        insurance under section 4902(a) of this title, not later than
        30 days after the later of - 
            (i) the date on which a request is received under section
          4902(a)(1) of this title; or
            (ii) the date on which the mortgagor satisfies any evidence
          and certification requirements under section 4902(a)(3) (!1)
          of this title; and


          (B) with respect to termination of private mortgage insurance
        under section 4902(b) of this title, not later than 30 days
        after the scheduled termination date.

-SOURCE-
    (Pub. L. 105-216, Sec. 5, July 29, 1998, 112 Stat. 903.)

-REFTEXT-
                            REFERENCES IN TEXT                        
      Section 4902(a)(3) of this title, referred to in subsec.
    (b)(2)(A)(ii), was redesignated section 4902(a)(4) of this title by
    Pub. L. 106-569, title IV, Sec. 404(1)(C), Dec. 27, 2000, 114 Stat.
    2958.

-FOOTNOTE-
    (!1) See References in Text note below.


-End-



-CITE-
    12 USC Sec. 4905                                            01/03/2007

-EXPCITE-
    TITLE 12 - BANKS AND BANKING
    CHAPTER 49 - HOMEOWNERS PROTECTION

-HEAD-
    Sec. 4905. Disclosure requirements for lender paid mortgage
      insurance

-STATUTE-
    (a) Definitions
      For purposes of this section - 
        (1) the term "borrower paid mortgage insurance" means private
      mortgage insurance that is required in connection with a
      residential mortgage transaction, payments for which are made by
      the borrower;
        (2) the term "lender paid mortgage insurance" means private
      mortgage insurance that is required in connection with a
      residential mortgage transaction, payments for which are made by
      a person other than the borrower; and
        (3) the term "loan commitment" means a prospective mortgagee's
      written confirmation of its approval, including any applicable
      closing conditions, of the application of a prospective mortgagor
      for a residential mortgage loan.
    (b) Exclusion
      Sections 4902 through 4904 of this title do not apply in the case
    of lender paid mortgage insurance.
    (c) Notices to mortgagor
      In the case of lender paid mortgage insurance that is required in
    connection with a residential mortgage transaction - 
        (1) not later than the date on which a loan commitment is made
      for the residential mortgage transaction, the prospective
      mortgagee shall provide to the prospective mortgagor a written
      notice - 
          (A) that lender paid mortgage insurance differs from borrower
        paid mortgage insurance, in that lender paid mortgage insurance
        may not be canceled by the mortgagor, while borrower paid
        mortgage insurance could be cancelable by the mortgagor in
        accordance with section 4902(a) of this title, and could
        automatically terminate on the termination date in accordance
        with section 4902(b) of this title;
          (B) that lender paid mortgage insurance - 
            (i) usually results in a residential mortgage having a
          higher interest rate than it would in the case of borrower
          paid mortgage insurance; and
            (ii) terminates only when the residential mortgage is
          refinanced (under the meaning given such term in the
          regulations issued by the Board of Governors of the Federal
          Reserve System to carry out the Truth in Lending Act (15
          U.S.C. 1601 et seq.)), paid off, or otherwise terminated; and

          (C) that lender paid mortgage insurance and borrower paid
        mortgage insurance both have benefits and disadvantages,
        including a generic analysis of the differing costs and
        benefits of a residential mortgage in the case lender paid
        mortgage insurance versus borrower paid mortgage insurance over
        a 10-year period, assuming prevailing interest and property
        appreciation rates;
          (D) that lender paid mortgage insurance may be tax-deductible
        for purposes of Federal income taxes, if the mortgagor itemizes
        expenses for that purpose; and

        (2) not later than 30 days after the termination date that
      would apply in the case of borrower paid mortgage insurance, the
      servicer shall provide to the mortgagor a written notice
      indicating that the mortgagor may wish to review financing
      options that could eliminate the requirement for private mortgage
      insurance in connection with the residential mortgage
      transaction.
    (d) Standard forms
      The servicer of a residential mortgage transaction may develop
    and use a standardized form or forms for the provision of notices
    to the mortgagor, as required under subsection (c) of this section.

-SOURCE-
    (Pub. L. 105-216, Sec. 6, July 29, 1998, 112 Stat. 904; Pub. L. 106-
    569, title IV, Secs. 403(c), 406(a), Dec. 27, 2000, 114 Stat.
    2957, 2959.)

-REFTEXT-
                            REFERENCES IN TEXT                        
      The Truth in Lending Act, referred to in subsec.(c)(1)(B)(ii), is
    title I of Pub. L. 90-321, May 29, 1968, 82 Stat. 146, as amended,
    which is classified generally to subchapter I (Sec. 1601 et seq.)
    of chapter 41 of Title 15, Commerce and Trade. For complete
    classification of this Act to the Code, see Short Title note set
    out under section 1601 of Title 15 and Tables.


-MISC1-
                                AMENDMENTS                            
      2000 - Subsec. (c). Pub. L. 106-569, Sec. 403(c)(1)(A), struck
    out "a residential mortgage or" before "a residential mortgage
    transaction" in introductory provisions.
      Subsec. (c)(1)(B)(ii). Pub. L. 106-569, Sec. 406(a), inserted
    "(under the meaning given such term in the regulations issued by
    the Board of Governors of the Federal Reserve System to carry out
    the Truth in Lending Act (15 U.S.C. 1601 et seq.))" after
    "refinanced".
      Subsec. (c)(2). Pub. L. 106-569, Sec. 403(c)(1)(B), inserted
    "transaction" before period at end.
      Subsec. (d). Pub. L. 106-569, Sec. 403(c)(2), inserted
    "transaction" after "residential mortgage".

-End-



-CITE-
    12 USC Sec. 4906                                            01/03/2007

-EXPCITE-
    TITLE 12 - BANKS AND BANKING
    CHAPTER 49 - HOMEOWNERS PROTECTION

-HEAD-
    Sec. 4906. Fees for disclosures

-STATUTE-
      No fee or other cost may be imposed on any mortgagor with respect
    to the provision of any notice or information to the mortgagor
    pursuant to this chapter.

-SOURCE-
    (Pub. L. 105-216, Sec. 7, July 29, 1998, 112 Stat. 905.)

-End-



-CITE-
    12 USC Sec. 4907                                            01/03/2007

-EXPCITE-
    TITLE 12 - BANKS AND BANKING
    CHAPTER 49 - HOMEOWNERS PROTECTION

-HEAD-
    Sec. 4907. Civil liability

-STATUTE-
    (a) In general
      Any servicer, mortgagee, or mortgage insurer that violates a
    provision of this chapter shall be liable to each mortgagor to whom
    the violation relates for - 
        (1) in the case of an action by an individual, or a class
      action in which the liable party is not subject to section 4909
      of this title, any actual damages sustained by the mortgagor as a
      result of the violation, including interest (at a rate determined
      by the court) on the amount of actual damages, accruing from the
      date on which the violation commences;
        (2) in the case of - 
          (A) an action by an individual, such statutory damages as the
        court may allow, not to exceed $2,000; and
          (B) in the case of a class action - 
            (i) in which the liable party is subject to section 4909 of
          this title, such amount as the court may allow, except that
          the total recovery under this subparagraph in any class
          action or series of class actions arising out of the same
          violation by the same liable party shall not exceed the
          lesser of $500,000 or 1 percent of the net worth of the
          liable party, as determined by the court; and
            (ii) in which the liable party is not subject to section
          4909 of this title, such amount as the court may allow, not
          to exceed $1,000 as to each member of the class, except that
          the total recovery under this subparagraph in any class
          action or series of class actions arising out of the same
          violation by the same liable party shall not exceed the
          lesser of $500,000 or 1 percent of the gross revenues of the
          liable party, as determined by the court;

        (3) costs of the action; and
        (4) reasonable attorney fees, as determined by the court.
    (b) Timing of actions
      No action may be brought by a mortgagor under subsection (a) of
    this section later than 2 years after the date of the discovery of
    the violation that is the subject of the action.
    (c) Limitations on liability
      (1) In general
        With respect to a residential mortgage transaction, the failure
      of a servicer to comply with the requirements of this chapter due
      to the failure of a mortgage insurer or a mortgagee to comply
      with the requirements of this chapter, shall not be construed to
      be a violation of this chapter by the servicer.
      (2) Rule of construction
        Nothing in paragraph (1) shall be construed to impose any
      additional requirement or liability on a mortgage insurer, a
      mortgagee, or a holder of a residential mortgage.

-SOURCE-
    (Pub. L. 105-216, Sec. 8, July 29, 1998, 112 Stat. 905.)

-End-



-CITE-
    12 USC Sec. 4908                                            01/03/2007

-EXPCITE-
    TITLE 12 - BANKS AND BANKING
    CHAPTER 49 - HOMEOWNERS PROTECTION

-HEAD-
    Sec. 4908. Effect on other laws and agreements

-STATUTE-
    (a) Effect on State law
      (1) In general
        With respect to any residential mortgage or residential
      mortgage transaction consummated after the effective date of this
      chapter, and except as provided in paragraph (2), the provisions
      of this chapter shall supersede any provisions of the law of any
      State relating to requirements for obtaining or maintaining
      private mortgage insurance in connection with residential
      mortgage transactions, cancellation or automatic termination of
      such private mortgage insurance, any disclosure of information
      addressed by this chapter, and any other matter specifically
      addressed by this chapter.
      (2) Protection of existing State laws
        (A) In general
          The provisions of this chapter do not supersede protected
        State laws, except to the extent that the protected State laws
        are inconsistent with any provision of this chapter, and then
        only to the extent of the inconsistency.
        (B) Inconsistencies
          A protected State law shall not be considered to be
        inconsistent with a provision of this chapter if the protected
        State law - 
            (i) requires termination of private mortgage insurance or
          other mortgage guaranty insurance - 
              (I) at a date earlier than as provided in this chapter;
            or
              (II) when a mortgage principal balance is achieved that
            is higher than as provided in this chapter; or

            (ii) requires disclosure of information - 
              (I) that provides more information than the information
            required by this chapter; or
              (II) more often or at a date earlier than is required by
            this chapter.
        (C) Protected State laws
          For purposes of this paragraph, the term "protected State
        law" means a State law - 
            (i) regarding any requirements relating to private mortgage
          insurance in connection with residential mortgage
          transactions;
            (ii) that was enacted not later than 2 years after July 29,
          1998; and
            (iii) that is the law of a State that had in effect, on or
          before January 2, 1998, any State law described in clause
          (i).
    (b) Effect on other agreements
      The provisions of this chapter shall supersede any conflicting
    provision contained in any agreement relating to the servicing of a
    residential mortgage loan entered into by the Federal National
    Mortgage Association, the Federal Home Loan Mortgage Corporation,
    or any private investor or note holder (or any successors thereto).

-SOURCE-
    (Pub. L. 105-216, Sec. 9, July 29, 1998, 112 Stat. 906.)

-REFTEXT-
                            REFERENCES IN TEXT                        
      The effective date of this chapter, referred to in subsec.
    (a)(1), is 1 year after July 29, 1998, see section 13 of Pub. L.
    105-216, set out as an Effective Date note under section 4901 of
    this title.

-End-



-CITE-
    12 USC Sec. 4909                                            01/03/2007

-EXPCITE-
    TITLE 12 - BANKS AND BANKING
    CHAPTER 49 - HOMEOWNERS PROTECTION

-HEAD-
    Sec. 4909. Enforcement

-STATUTE-
    (a) In general
      Compliance with the requirements imposed under this chapter shall
    be enforced under - 
        (1) section 8 of the Federal Deposit Insurance Act [12 U.S.C.
      1818] - 
          (A) by the appropriate Federal banking agency (as defined in
        section 3(q) of the Federal Deposit Insurance Act [12 U.S.C.
        1813(q)]) in the case of insured depository institutions (as
        defined in section 3(c)(2) of such Act [12 U.S.C. 1813(c)(2)]);
          (B) by the Federal Deposit Insurance Corporation in the case
        of depository institutions described in clause (i), (ii), or
        (iii) of section 19(b)(1)(A) of the Federal Reserve Act [12
        U.S.C. 461(b)(1)(A)] that are not insured depository
        institutions (as defined in section 3(c)(2) of the Federal
        Deposit Insurance Act [12 U.S.C. 1813(c)(2)]); and
          (C) by the Director of the Office of Thrift Supervision in
        the case of depository institutions described in clause (v) and
        or (vi) of section 19(b)(1)(A) of the Federal Reserve Act [12
        U.S.C. 461(b)(1)(A)] that are not insured depository
        institutions (as defined in section 3(c)(2) of the Federal
        Deposit Insurance Act [12 U.S.C. 1813(c)(2)]);

        (2) the Federal Credit Union Act [12 U.S.C. 1751 et seq.], by
      the National Credit Union Administration Board in the case of
      depository institutions described in clause (iv) of section
      19(b)(1)(A) of the Federal Reserve Act [12 U.S.C. 461(b)(1)(A)];
      and
        (3) part C of title V of the Farm Credit Act of 1971 (12 U.S.C.
      2261 et seq.), by the Farm Credit Administration in the case of
      an institution that is a member of the Farm Credit System.
    (b) Additional enforcement powers
      (1) Violation of this chapter treated as violation of other Acts
        For purposes of the exercise by any agency referred to in
      subsection (a) of this section of such agency's powers under any
      Act referred to in such subsection, a violation of a requirement
      imposed under this chapter shall be deemed to be a violation of a
      requirement imposed under that Act.
      (2) Enforcement authority under other Acts
        In addition to the powers of any agency referred to in
      subsection (a) of this section under any provision of law
      specifically referred to in such subsection, each such agency may
      exercise, for purposes of enforcing compliance with any
      requirement imposed under this chapter, any other authority
      conferred on such agency by law.
    (c) Enforcement and reimbursement
      In carrying out its enforcement activities under this section,
    each agency referred to in subsection (a) of this section shall - 
        (1) notify the mortgagee or servicer of any failure of the
      mortgagee or servicer to comply with 1 or more provisions of this
      chapter;
        (2) with respect to each such failure to comply, require the
      mortgagee or servicer, as applicable, to correct the account of
      the mortgagor to reflect the date on which the mortgage insurance
      should have been canceled or terminated under this chapter; and
        (3) require the mortgagee or servicer, as applicable, to
      reimburse the mortgagor in an amount equal to the total unearned
      premiums paid by the mortgagor after the date on which the
      obligation to pay those premiums ceased under this chapter.

-SOURCE-
    (Pub. L. 105-216, Sec. 10, July 29, 1998, 112 Stat. 907.)

-REFTEXT-
                            REFERENCES IN TEXT                        
      The Federal Credit Union Act, referred to in subsec. (a)(2), is
    act June 26, 1934, ch. 750, 48 Stat. 1216, as amended, which is
    classified generally to chapter 14 (Sec. 1751 et seq.) of this
    title. For complete classification of this Act to the Code, see
    section 1751 of this title and Tables.
      The Farm Credit Act of 1971, referred to in subsec. (a)(3), is
    Pub. L. 92-181, Dec. 10, 1971, 85 Stat. 583, as amended. Part C of
    title V of the Act is classified generally to part C (Sec. 2261 et
    seq.) of subchapter V of chapter 23 of this title. For complete
    classification of this Act to the Code, see Short Title note set
    out under section 2001 of this title and Tables.

-End-



-CITE-
    12 USC Sec. 4910                                            01/03/2007

-EXPCITE-
    TITLE 12 - BANKS AND BANKING
    CHAPTER 49 - HOMEOWNERS PROTECTION

-HEAD-
    Sec. 4910. Construction

-STATUTE-
    (a) PMI not required
      Nothing in this chapter shall be construed to impose any
    requirement for private mortgage insurance in connection with a
    residential mortgage transaction.
    (b) No preclusion of cancellation or termination agreements
      Nothing in this chapter shall be construed to preclude
    cancellation or termination, by agreement between a mortgagor and
    the holder of the mortgage, of a requirement for private mortgage
    insurance in connection with a residential mortgage transaction
    before the cancellation or termination date established by this
    chapter for the mortgage.

-SOURCE-
    (Pub. L. 105-216, Sec. 11, July 29, 1998, 112 Stat. 908.)

-End-