§ 4903. — Disclosure requirements.
[Laws in effect as of January 24, 2002]
[Document not affected by Public Laws enacted between
January 24, 2002 and December 19, 2002]
[CITE: 12USC4903]
TITLE 12--BANKS AND BANKING
CHAPTER 49--HOMEOWNERS PROTECTION
Sec. 4903. Disclosure requirements
(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.
(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.)
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.
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''.
Section Referred to in Other Sections
This section is referred to in section 4905 of this title.