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§ 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.



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