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12 U.S.C. § 4905 — Disclosure requirements for lender paid mortgage insurance
Federal law — U.S. Code and appendices · legal_authorities
**(a) Definitions** For purposes of this section—
(1) the term “borrower paid mortgage insurance” means private mortgage insurance that is required in connection with a residential mortgage transaction, payments for which are made by the borrower;
(2) the term “lender paid mortgage insurance” means private mortgage insurance that is required in connection with a residential mortgage transaction, payments for which are made by a person other than the borrower; and
(3) the term “loan commitment” means a prospective mortgagee’s written confirmation of its approval, including any applicable closing conditions, of the application of a prospective mortgagor for a residential mortgage loan.
**(b) Exclusion** Sections 4902 through 4904 of this title do not apply in the case of lender paid mortgage insurance.
**(c) Notices to mortgagor** In the case of lender paid mortgage insurance that is required in connection with a residential mortgage transaction—
(1) not later than the date on which a loan commitment is made for the residential mortgage transaction, the prospective mortgagee shall provide to the prospective mortgagor a written notice—
(A) that lender paid mortgage insurance differs from borrower paid mortgage insurance, in that lender paid mortgage insurance may not be canceled by the mortgagor, while borrower paid mortgage insurance could be cancelable by the mortgagor in accordance with [section 4902(a) of this title](https://uscode.house.gov/view.xhtml?req=granuleid:USC-prelim-title12-section4902/a&num=0&edition=prelim), and could automatically terminate on the termination date in accordance with [section 4902(b) of this title](https://uscode.house.gov/view.xhtml?req=granuleid:USC-prelim-title12-section4902/b&num=0&edition=prelim);
(B) that lender paid mort
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Source location: Title 12, Chapter 49, § 4905; chapter-049-homeowners-protection.md
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**(a) Definitions** For purposes of this section—
(1) the term “borrower paid mortgage insurance” means private mortgage insurance that is required in connection with a residential mortgage transaction, payments for which are made by the borrower;
(2) the term “lender paid mortgage insurance” means private mortgage insurance that is required in connection with a residential mortgage transaction, payments for which are made by a person other than the borrower; and
(3) the term “loan commitment” means a prospective mortgagee’s written confirmation of its approval, including any applicable closing conditions, of the application of a prospective mortgagor for a residential mortgage loan.
**(b) Exclusion** Sections 4902 through 4904 of this title do not apply in the case of lender paid mortgage insurance.
**(c) Notices to mortgagor** In the case of lender paid mortgage insurance that is required in connection with a residential mortgage transaction—
(1) not later than the date on which a loan commitment is made for the residential mortgage transaction, the prospective mortgagee shall provide to the prospective mortgagor a written notice—
(A) that lender paid mortgage insurance differs from borrower paid mortgage insurance, in that lender paid mortgage insurance may not be canceled by the mortgagor, while borrower paid mortgage insurance could be cancelable by the mortgagor in accordance with [section 4902(a) of this title](https://uscode.house.gov/view.xhtml?req=granuleid:USC-prelim-title12-section4902/a&num=0&edition=prelim), and could automatically terminate on the termination date in accordance with [section 4902(b) of this title](https://uscode.house.gov/view.xhtml?req=granuleid:USC-prelim-title12-section4902/b&num=0&edition=prelim);
(B) that lender paid mortgage insurance—
(i) usually results in a residential mortgage having a higher interest rate than it would in the case of borrower paid mortgage insurance; and
(ii) terminates only when the residential mortgage is refinanced (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](https://uscode.house.gov/view.xhtml?req=granuleid:USC-prelim-title15-section1601&num=0&edition=prelim) et seq.)), paid off, or otherwise terminated; and
(C) that lender paid mortgage insurance and borrower paid mortgage insurance both have benefits and disadvantages, including a generic analysis of the differing costs and benefits of a residential mortgage in the case lender paid mortgage insurance versus borrower paid mortgage insurance over a 10-year period, assuming prevailing interest and property appreciation rates;
(D) that lender paid mortgage insurance may be tax-deductible for purposes of Federal income taxes, if the mortgagor itemizes expenses for that purpose; and
(2) not later than 30 days after the termination date that would apply in the case of borrower paid mortgage insurance, the servicer shall provide to the mortgagor a written notice indicating that the mortgagor may wish to review financing options that could eliminate the requirement for private mortgage insurance in connection with the residential mortgage transaction.
**(d) Standard forms** The servicer of a residential mortgage transaction may develop and use a standardized form or forms for the provision of notices to the mortgagor, as required under subsection (c).
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Federal law — U.S. Code and appendices · legal_authorities
**(a) Informed use of credit** The Congress finds that economic stabilization would be enhanced and the competition among the various financial institutions and other firms engaged in the extension of consumer credit would be strengthened by the informed use of credit. The informed use of credit results from an awareness of the cost thereof by consumers. It is the purpose of this subchapter to assure a meaningful disclosure of credit terms so that the consumer will be able to compare more readily the various credit terms available to him and avoid the uninformed use of credit, and to protect the consumer against inaccurate and unfair credit billing and credit card practices.
**(b) Terms of personal property leases** The Congress also finds that there has been a recent trend toward leasing automobiles and other durable goods for consumer use as an alternative to installment credit sales and that these leases have been offered without adequate cost disclosures. It is the purpose of this subchapter to assure a meaningful disclosure of the terms of leases of personal property for personal, family, or household purposes so as to enable the lessee to compare more readily the various lease terms available to him, limit balloon payments in consumer leasing, enable comparison of lease terms with credit terms where appropriate, and to assure meaningful and accurate disclosures of lease terms in advertisements.
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Federal law — U.S. Code and appendices · legal_authorities
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
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Federal law — U.S. Code and appendices · legal_authorities
Page 1771
TITLE 12—BANKS AND BANKING
§ 4905
1 See References in Text note below.
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, which is classified principally to chapter
27 (§ 2601 et seq.) of this title. For complete classifica-
tion 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, §§ 402(c)(2)(A)(i),
403(b)(1)(A), substituted ‘‘residential mortgage trans-
action (other than a residential mortgage transaction
described in section 4902(g)(1) of this title)’’ for ‘‘resi-
dential mortgage or mortgage transaction (other than
a mortgage or mortgage transaction described in sec-
tion 4902(f)(1) of this title)’’ in introductory provisions.
Subsec. (a)(1)(A)(ii)(IV), (B)(iii). Pub. L. 106–569,
§ 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,
§§ 402(c)(2)(B),
403(b)(1)(B), substituted ‘‘residential mortgage trans-
action’’ 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, § 403(b)(2), substituted
‘‘subsection (a)(3)’’ for ‘‘paragraphs (1)(B) and (3) of sub-
section (a)’’.
Subsec. (d). Pub. L. 106–569, § 403(b)(3), inserted before
period at end ‘‘, which disclosures shall relate to the
mortgagor’s rights under this chapter’’.
Statutory Notes and Related Subsidiaries
EFFECTIVE DATE
Section effective 1 year after July 29, 1998, see section
13 of Pub. L. 105–216, set out as a note under section
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Federal law — U.S. Code and appendices · legal_authorities
Page 1452
TITLE 15—COMMERCE AND TRADE
§ 1601
Sec.
1679f.
Noncompliance with this subchapter.
1679g.
Civil liability.
1679h.
Administrative enforcement.
1679i.
Statute of limitations.
1679j.
Relation to State law.
SUBCHAPTER III—CREDIT REPORTING AGENCIES
1681.
Congressional findings and statement of pur-
pose.
1681a.
Definitions; rules of construction.
1681b.
Permissible purposes of consumer reports.
1681c.
Requirements relating to information con-
tained in consumer reports.
1681c–1.
Identity theft prevention; fraud alerts and ac-
tive duty alerts.
1681c–2.
Block of information resulting from identity
theft.
1681c–3.
Adverse information in cases of trafficking.
1681d.
Disclosure of investigative consumer reports.
1681e.
Compliance procedures.
1681f.
Disclosures to governmental agencies.
1681g.
Disclosures to consumers.
1681h.
Conditions and form of disclosure to con-
sumers.
1681i.
Procedure in case of disputed accuracy.
1681j.
Charges for certain disclosures.
1681k.
Public record information for employment
purposes.
1681l.
Restrictions on investigative consumer re-
ports.
1681m.
Requirements on users of consumer reports.
1681n.
Civil liability for willful noncompliance.
1681o.
Civil liability for negligent noncompliance.
1681p.
Jurisdiction of courts; limitation of actions.
1681q.
Obtaining information under false pretenses.
1681r.
Unauthorized disclosures by officers or em-
ployees.
1681s.
Administrative enforcement.
1681s–1.
Information on overdue child support obliga-
tions.
1681s–2.
Responsibilities of furnishers of information
to consumer reporting agencies.
1681s–3.
Affiliate sharing.
1681t.
Relation to State laws.
1681u.
Disclosures to FBI for counterintelligence
purposes.
1681v.
Disclosure
Source: Supplied 2024 U.S. Code historical extraction · 15 U.S.C. § 1601
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