§ 4901. — Definitions.
[Laws in effect as of January 24, 2002]
[Document not affected by Public Laws enacted between
January 24, 2002 and December 19, 2002]
[CITE: 12USC4901]
TITLE 12--BANKS AND BANKING
CHAPTER 49--HOMEOWNERS PROTECTION
Sec. 4901. Definitions
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.
(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.)
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.
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'.''
