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