Source: http://uscode.house.gov/view.xhtml?req=(title:15%20section:1639c%20edition:prelim)
Timestamp: 2018-11-14 16:29:18
Document Index: 750222824

Matched Legal Cases: ['§ 1639', '§1639', 'art 1026', '§129', '§1100', '§1411', '§89003', '§101', '§307', '§1100', '§1701', '§101', '§307', '§1411']

[USC10] 15 USC 1639c: Minimum standards for residential mortgage loans
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15 USC 1639c: Minimum standards for residential mortgage loans Text contains those laws in effect on November 13, 2018
§1639c. Minimum standards for residential mortgage loans
(a) Ability to repay
A creditor making a residential mortgage loan shall verify amounts of income or assets that such creditor relies on to determine repayment ability, including expected income or assets, by reviewing the consumer's Internal Revenue Service Form W–2, tax returns, payroll receipts, financial institution records, or other third-party documents that provide reasonably reliable evidence of the consumer's income or assets. In order to safeguard against fraudulent reporting, any consideration of a consumer's income history in making a determination under this subsection shall include the verification of such income by the use of-
(6) Nonstandard loans
(A) Variable rate loans that defer repayment of any principal or interest
For purposes of making any determination under this subsection, a creditor shall calculate the monthly payment amount for principal and interest on any residential mortgage loan by assuming-
In considering any application for refinancing an existing hybrid loan by the creditor into a standard loan to be made by the same creditor in any case in which there would be a reduction in monthly payment and the mortgagor has not been delinquent on any payment on the existing hybrid loan, the creditor may-
(b) Presumption of ability to repay
The term "qualified mortgage" means any residential mortgage loan-
(i) for which the regular periodic payments for the loan may not-
(C) Points and fees
The Bureau may, by regulation, provide that the term "qualified mortgage" includes a balloon loan-
(iv) that is extended by a creditor that-
(I) the term "covered institution" means an insured depository institution or an insured credit union that, together with its affiliates, has less than $10,000,000,000 in total consolidated assets;
(II) the term "insured credit union" has the meaning given the term in section 1752 of title 12;
(III) the term "insured depository institution" has the meaning given the term in section 1813 of title 12;
(IV) the term "interest-only" means that, under the terms of the legal obligation, one or more of the periodic payments may be applied solely to accrued interest and not to loan principal; and
(V) the term "negative amortization" means payment of periodic payments that will result in an increase in the principal balance under the terms of the legal obligation.
(I) the term "qualified mortgage" includes any residential mortgage loan-
(aa) that is originated and retained in portfolio by a covered institution;
(bb) that is in compliance with the limitations with respect to prepayment penalties described in subsections (c)(1) and (c)(3);
(cc) that is in compliance with the requirements of clause (vii) of subparagraph (A);
(dd) that does not have negative amortization or interest-only features; and
(ee) for which the covered institution considers and documents the debt, income, and financial resources of the consumer in accordance with clause (iv); and
(II) a residential mortgage loan described in subclause (I) shall be deemed to meet the requirements of subsection (a).
(iii) Exception for certain transfers
A residential mortgage loan described in clause (ii)(I) shall not qualify for the safe harbor under clause (ii) if the legal title to the residential mortgage loan is sold, assigned, or otherwise transferred to another person unless the residential mortgage loan is sold, assigned, or otherwise transferred-
(I) to another person by reason of the bankruptcy or failure of a covered institution;
(II) to a covered institution so long as the loan is retained in portfolio by the covered institution to which the loan is sold, assigned, or otherwise transferred;
(III) pursuant to a merger of a covered institution with another person or the acquisition of a covered institution by another person or of another person by a covered institution, so long as the loan is retained in portfolio by the person to whom the loan is sold, assigned, or otherwise transferred; or
(IV) to a wholly owned subsidiary of a covered institution, provided that, after the sale, assignment, or transfer, the residential mortgage loan is considered to be an asset of the covered institution for regulatory accounting purposes.
(iv) Consideration and documentation requirements
The consideration and documentation requirements described in clause (ii)(I)(ee) shall-
(I) not be construed to require compliance with, or documentation in accordance with, appendix Q to part 1026 of title 12, Code of Federal Regulations, or any successor regulation; and
(II) be construed to permit multiple methods of documentation.
(B) Revision of safe harbor criteria
(C) Consideration of underwriting requirements for Property Assessed Clean Energy financing
In this subparagraph, the term "Property Assessed Clean Energy financing" means financing to cover the costs of home improvements that results in a tax assessment on the real property of the consumer.
The Bureau shall prescribe regulations that carry out the purposes of subsection (a) and apply section 1640 of this title with respect to violations under subsection (a) of this section with respect to Property Assessed Clean Energy financing, which shall account for the unique nature of Property Assessed Clean Energy financing.
(iii) Collection of information and consultation
In prescribing the regulations under this subparagraph, the Bureau-
(I) may collect such information and data that the Bureau determines is necessary; and
(II) shall consult with State and local governments and bond-issuing authorities.
(c) Prohibition on certain prepayment penalties
(1) Prohibited on certain loans
For purposes of this subsection, a "qualified mortgage" may not include a residential mortgage loan that-
(ii) has an annual percentage rate that exceeds the average prime offer rate for a comparable transaction, as of the date the interest rate is set-
The Bureau-
No creditor may finance, directly or indirectly, in connection with any residential mortgage loan or with any extension of credit under an open end consumer credit plan secured by the principal dwelling of the consumer, any credit life, credit disability, credit unemployment, or credit property insurance, or any other accident, loss-of-income, life, or health insurance, or any payments directly or indirectly for any debt cancellation or suspension agreement or contract, except that-
No creditor may extend credit to a borrower in connection with a consumer credit transaction under an open or closed end consumer credit plan secured by a dwelling or residential real property that includes a dwelling, other than a reverse mortgage, that provides or permits a payment plan that may, at any time over the term of the extension of credit, result in negative amortization unless, before such transaction is consummated-
(1) the creditor provides the consumer with a statement that-
(g) Protection against loss of anti-deficiency protection
In the case of any residential mortgage loan, a creditor shall disclose prior to settlement or, in the case of a person becoming a creditor with respect to an existing residential mortgage loan, at the time such person becomes a creditor-
(Pub. L. 90–321, title I, §129C, as added and amended Pub. L. 111–203, title X, §1100A(2), title XIV, §§1411(a)(2), 1412, 1414(a), (c), (d), July 21, 2010, 124 Stat. 2107 , 2142, 2145, 2149, 2152; Pub. L. 114–94, div. G, title LXXXIX, §89003(1), Dec. 4, 2015, 129 Stat. 1800 ; Pub. L. 115–174, title I, §101, title III, §307, May 24, 2018, 132 Stat. 1297 , 1347.)
Section 1602(aa)(4) of this title, referred to in subsecs. (a)(5)(C) and (b)(2)(C)(i), was redesignated section 1602(bb)(4) of this title by Pub. L. 111–203, title X, §1100A(1)(A), July 21, 2010, 124 Stat. 2107 .
The National Housing Act, referred to in subsec. (b)(3)(B)(ii)(I), is act June 27, 1934, ch. 847, 48 Stat. 1246 , which is classified principally to chapter 13 (§1701 et seq.) of Title 12, Banks and Banking. For complete classification of this Act to the Code, see section 1701 of Title 12 and Tables.
The Mortgage Reform and Anti-Predatory Lending Act, referred to in subsec. (c)(2)(C), is title XIV of Pub. L. 111–203, July 21, 2010, 124 Stat. 2136 . For complete classification of this Act to the Code, see Short Title of 2010 Amendment note set out under section 1601 of this title and Tables.
2018-Subsec. (b)(2)(F). Pub. L. 115–174, §101, added subpar. (F).
Subsec. (b)(3)(C). Pub. L. 115–174, §307, added subpar. (C).
2015-Subsec. (b)(2)(E)(iv)(I). Pub. L. 114–94 struck out "predominantly" after "operates".
Pub. L. 111–203, title XIV, §1411(a)(1), July 21, 2010, 124 Stat. 2142 , provided that: "No regulation, order, or guidance issued by the Bureau under this title [see Tables for classification] shall be construed as requiring a depository institution to apply mortgage underwriting standards that do not meet the minimum underwriting standards required by the appropriate prudential regulator of the depository institution."