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U.S. Code as of:
01/19/04
Section 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.
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