Negative Amortization Mortgage Loan Transparency Act

Negative Amortization Mortgage Loan Transparency Act - Amends the Truth in Lending Act to require a lender to make specified prior disclosures to a first-time borrower in connection with a consumer credit transaction secured by residential real property with a dwelling, other than a reverse mortgage, where the payment plan may result in negative amortization over the term of the loan.

Requires the consumer debtor to provide the creditor with documentation that the consumer received home ownership counseling from organizations or counselors certified by the Secretary of Housing and Urban Development.

[Congressional Bills 110th Congress]
[From the U.S. Government Publishing Office]
[H.R. 3894 Introduced in House (IH)]







110th CONGRESS
  1st Session
                                H. R. 3894

    To amend the Truth in Lending Act to establish requirements for 
providing negatively amortizing mortgage loans to first-time borrowers, 
                        and for other purposes.


_______________________________________________________________________


                    IN THE HOUSE OF REPRESENTATIVES

                            October 18, 2007

   Ms. Bean introduced the following bill; which was referred to the 
                    Committee on Financial Services

_______________________________________________________________________

                                 A BILL


 
    To amend the Truth in Lending Act to establish requirements for 
providing negatively amortizing mortgage loans to first-time borrowers, 
                        and for other purposes.

    Be it enacted by the Senate and House of Representatives of the 
United States of America in Congress assembled,

SECTION 1. SHORT TITLE.

    This Act may be cited as the ``Negative Amortization Mortgage Loan 
Transparency Act''.

SEC. 2. REQUIREMENTS FOR MORTGAGE LOANS THAT PERMIT NEGATIVE 
              AMORTIZATION.

    (a) In General.--Chapter 2 of the Truth in Lending Act (15 U.S.C. 
1631 et seq.) is amended by inserting after section 129 the following 
new section:
``Sec. 129A. Mortgages with negative amortization.
    ``No creditor may extend credit to a first-time borrower in 
connection with a consumer credit transaction under an open or closed 
end consumer credit plan secured by residential real property that 
includes a dwelling, other than a reverse mortgage, that provides or 
permits a payment plan that may, at any time over the term of the 
extension of credit, result in negative amortization unless, before 
such transaction is consummated--
            ``(1) the creditor provides the consumer with a statement 
        that--
                    ``(A) the pending transaction will or may, as the 
                case may be result in negative amortization;
                    ``(B) describes negative amortization in such 
                manner as the Board shall prescribe;
                    ``(C) negative amortization increases the 
                outstanding principal balance of the account; and
                    ``(D) negative amortization reduces the consumer's 
                equity in the real property; and
            ``(2) the consumer provides the creditor with sufficient 
        documentation to demonstrate that the consumer received 
        homeownership counseling from organizations or counselors 
        certified by the Secretary of Housing and Urban Development as 
        competent to provide such counseling.''.
    (b) Clerical Amendment.--The table of sections for chapter 2 of the 
Truth in Lending Act is amended by inserting after the item relating to 
section 129 the following new item:

``129A. Mortgages with negative amortization.''.
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