I
106TH CONGRESS
2D SESSION
H. R. 3637
To amend the Homeowners Protection Act of 1998 to make certain technical
corrections.
IN THE HOUSE OF REPRESENTATIVES
FEBRUARY 10, 2000
Mrs. ROUKEMA (for herself, Mr. LEACH, Mr. LAFALCE, Mr. VENTO, Mr.
LAZIO, Mr. FRANK of Massachusetts, and Mr. HANSEN) introduced the
following bill; which was referred to the Committee on banking and Fi-
nancial Services
A BILL
To amend the Homeowners Protection Act of 1998 to make
certain technical corrections.
Be it enacted by the Senate and House of Representa-
tives of the United States of America in Congress assembled,
SECTION 1. SHORT TITLE.
This Act may be cited as the ‘‘Private Mortgage In-
surance Technical Corrections and Clarification Act’’.
SEC. 2. CHANGES IN AMORTIZATION SCHEDULE.
(a) TREATMENT
OF ADJUSTABLE RATE MORT-
GAGES.—The Homeowners Protection Act of 1998 (12
U.S.C. 4901 et seq.) is amended—
(1) in section 2—
(A) in paragraph (2)(B)(i), by striking
‘‘amortization schedules’’ and inserting ‘‘the
amortization schedule then in effect’’;
(B) in paragraph (16)(B), by striking
‘‘amortization schedules’’ and inserting ‘‘the
amortization schedule then in effect’’;
(C) 
by 
redesignating 
paragraphs 
(6)
through (16) (as amended by the preceding pro-
visions of this paragraph) as paragraphs (8)
through (18), respectively; and
(D) by inserting after paragraph (5) the
following new paragraph:
‘‘(6) AMORTIZATION SCHEDULE THEN IN EF-
FECT.—The term ‘amortization schedule then in ef-
fect’ means, with respect to an adjustable rate mort-
gage, 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.’’; and
(2) in section 3(f)(1)(B)(ii), by striking ‘‘amor-
tization schedules’’ and inserting ‘‘the amortization
schedule then in effect’’.
(b) TREATMENT OF BALLOON MORTGAGES.—Para-
graph (1) of section 2 of the Homeowners Protection Act
of 1998 (12 U.S.C. 4901(1)) is amended by adding at the
end the following new sentence: ‘‘A residential mortgage
that (A) does not fully amortize over the term of the obli-
gation, 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 Act.’’.
(c) TREATMENT OF LOAN MODIFICATIONS.—
(1) IN
GENERAL.—Section 3 of the Home-
owners Protection Act of 1998 (12 U.S.C. 4902) is
amended—
(A) 
by 
redesignating 
subsections 
(d)
through (f) as subsections (e) through (g), re-
spectively; and
(B) by inserting after subsection (c) the
following new subsection:
‘‘(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 con-
ditions of such loan.’’.
(2) CONFORMING AMENDMENTS.—Section 4(a)
of the Homeowners Protection Act of 1998 (12
U.S.C. 4903(a)) is amended—
(A) in paragraph (1)—
(i) in the matter preceding subpara-
graph (A), by striking ‘‘section 3(f)(1)’’
and inserting ‘‘section 3(g)(1)’’;
(ii) in subparagraph (A)(ii)(IV), by
striking ‘‘section 3(f)’’ and inserting ‘‘sec-
tion 3(g)’’; and
(iii) in subparagraph (B)(iii), by strik-
ing ‘‘section 3(f)’’ and inserting ‘‘section
3(g)’’; and
(B) in paragraph (2), by striking ‘‘section
3(f)(1)’’ and inserting ‘‘section 3(g)(1)’’.
SEC. 3. DELETION OF AMBIGUOUS REFERENCES TO RESI-
DENTIAL MORTGAGES.
(a) TERMINATION OF PRIVATE MORTGAGE INSUR-
ANCE.—Section 3 of the Homeowners Protection Act of
1998 (12 U.S.C. 4902) is amended—
(1) in subsection (c), by inserting ‘‘on residen-
tial mortgage transactions’’ after ‘‘imposed’’; and
(2) in subsection (g) (as so redesignated by sec-
tion 2(c)(1)(A) of this Act)—
(A) in paragraph (1), in the matter pre-
ceding subparagraph (A), by striking ‘‘mort-
gage or’’;
(B) in paragraph (2), by striking ‘‘mort-
gage or’’; and
(C) in paragraph (3), by striking ‘‘mort-
gage or’’ and inserting ‘‘residential mortgage or
residential’’.
(b) DISCLOSURE REQUIREMENTS.—Section 4 of the
Homeowners Protection Act of 1998 (12 U.S.C. 4903(a))
is amended—
(1) in subsection (a)—
(A) in paragraph (1)—
(i) by striking ‘‘mortgage or’’ the first
place it appears; and
(ii) by striking ‘‘mortgage or’’ the sec-
ond place it appears and inserting ‘‘resi-
dential’’; and
(B) in paragraph (2), by striking ‘‘mort-
gage or’’ and inserting ‘‘residential’’;
(2) in subsection (c), by striking ‘‘paragraphs
(1)(B) and (3) of subsection (a)’’ and inserting
‘‘subsection (a)(3)’’; and
(3) in subsection (d), by inserting before the pe-
riod at the end the following: ‘‘, which disclosures
shall relate to the mortgagor’s rights under this
Act’’.
(c) DISCLOSURE REQUIREMENTS FOR LENDER-PAID
MORTGAGE INSURANCE.—Section 6 of the Homeowners
Protection Act of 1998 (12 U.S.C. 4905) is amended—
(1) in subsection (c)—
(A) in the matter preceding paragraph (1),
by striking ‘‘a residential mortgage or’’; and
(B) in paragraph (2), by inserting ‘‘trans-
action’’ after ‘‘residential mortgage’’; and
(2) in subsection (d), by inserting ‘‘transaction’’
after ‘‘residential mortgage’’.
SEC. 4. CANCELLATION RIGHTS AFTER CANCELLATION
DATE.
Section 3 of the Homeowners Protection Act of 1998
(12 U.S.C. 4902) is amended—
(1) in subsection (a)—
(A) in the matter preceding paragraph (1),
by inserting after ‘‘cancellation date’’ the fol-
lowing: ‘‘or any later date that the mortgagor
fulfills all of the requirements under paragraphs
(1) through (4)’’;
(B) in paragraph (2), by striking ‘‘and’’ at
the end;
(C) by redesignating paragraph (3) as
paragraph (4); and
(D) by inserting after paragraph (2) the
following new paragraph:
‘‘(3) is current on the payments required by the
terms of the residential mortgage transaction; and’’;
and
(2) in subsection (e)(1)(B) (as so redesignated
by section 2(c)(1)(A) of this Act), by striking ‘‘sub-
section ‘‘(a)(3)’’ and inserting ‘‘subsection (a)(4)’’.
SEC. 5. CLARIFICATION OF CANCELLATION AND TERMI-
NATION ISSUES AND LENDER PAID MORT-
GAGE INSURANCE DISCLOSURE REQUIRE-
MENTS.
(a) GOOD PAYMENT HISTORY.—Section 2(4) of the
Homeowners Protection Act of 1998 (12 U.S.C. 4901(4))
is amended—
(1) in subparagraph (A)—
(A) by inserting ‘‘the later of (i)’’ before
‘‘the date’’; and
(ii) by inserting ‘‘, or (ii) the date
that the mortgagor submits a request for
cancellation under section 3(a)(1)’’ before
the semicolon; and
(B) in subparagraph (B)—
(i) by inserting ‘‘the later of (i)’’ be-
fore ‘‘the date’’; and
(ii) by inserting ‘‘, or (ii) the date
that the mortgagor submits a request for
cancellation under section 3(a)(1)’’ before
the period at the end.
(b) AUTOMATIC TERMINATION.—Paragraph (2) of
section 3(b) of the Homeowners Protection Act of 1998
(12 U.S.C. 4902(b)(2)) is amended to read as follows:
‘‘(2) if the mortgagor is not current on the ter-
mination date, on the first day of the first month be-
ginning after the date that the mortgagor becomes
current on the payments required by the terms of
the residential mortgage transaction.’’
(c) PREMIUM PAYMENTS.—Section 3 of the Home-
owners Protection Act of 1998 (12 U.S.C. 4902) is
amended by adding at the end the following new sub-
section:
‘‘(h) ACCRUED OBLIGATION
FOR PREMIUM PAY-
MENTS.—The cancellation or termination under this sec-
tion 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 mort-
gagor for premium payments accrued prior to the date on
which such cancellation or termination occurred.’’.
SEC. 6. DEFINITIONS.
(a) REFINANCED.—Section 6(c)(1)(B)(ii) of the
Homeowners Protection Act of 1998 (12 U.S.C.
4905(c)(1)(B)(ii)) is amended by inserting after ‘‘refi-
nanced’’ the following: ‘‘(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.))’’.
(b) MIDPOINT OF THE AMORTIZATION PERIOD.—
Section 2 of the Homeowners Protection Act of 1998 (12
U.S.C. 4901) is amended by inserting after paragraph (6)
(as added by section 2(a)(1)(D) of this Act) the following
new paragraph:
‘‘(7) MIDPOINT
OF
THE
AMORTIZATION
PE-
RIOD.—The term ‘‘midpoint of the amortization pe-
riod’’ 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 amor-
tized.’’.
(c) ORIGINAL VALUE.—Section 2(12) of the Home-
owners Protection Act of 1998 (12 U.S.C. 4901(10)) (as
so redesignated by section 2(a)(1)(C) of this Act) is
amended—
(1) by inserting ‘‘transaction’’ after ‘‘a residen-
tial mortgage’’; and
(2) by adding at the end the following new sen-
tence: ‘‘In the case of a residential mortgage trans-
action 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.’’.
(d) PRINCIPAL RESIDENCE.—Section 2 of the Home-
owners Protection Act of 1998 (12 U.S.C. 4901) is
amended—
(1) in paragraph (14) (as so redesignated by
section 2(a)(1)(C) of this Act) by striking ‘‘primary’’
and inserting ‘‘principal’’; and
(2) in paragraph (15) (as so redesignated by
section 2(a)(1)(C) of this Act) by striking ‘‘primary’’
and inserting ‘‘principal’’;
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