[Congressional Bills 110th Congress]
[From the U.S. Government Publishing Office]
[H.R. 3705 Introduced in House (IH)]







110th CONGRESS
  1st Session
                                H. R. 3705

To amend the Truth in Lending Act to require notice to consumers of an 
  upcoming adjustment or reset date with respect to hybrid adjustable 
                rate mortgages, and for other purposes.


_______________________________________________________________________


                    IN THE HOUSE OF REPRESENTATIVES

                           September 27, 2007

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

_______________________________________________________________________

                                 A BILL


 
To amend the Truth in Lending Act to require notice to consumers of an 
  upcoming adjustment or reset date with respect to hybrid adjustable 
                rate mortgages, 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 ``Fair Disclosure for Homeowners Act 
of 2007''.

SEC. 2. 6-MONTH NOTICE REQUIRED BEFORE RESET OF HYBRID ADJUSTABLE RATE 
              MORTGAGES.

    (a) In General.--Chapter 2 of the Truth in Lending Act (15 U.S.C. 
1631 et seq.) is amended by inserting after section 128 the following 
new section:
``Sec. 128A. Reset of hybrid adjustable rate mortgages
    ``(a) Hybrid Adjustable Rate Mortgages Defined.--For purposes of 
this section, the term `hybrid adjustable rate mortgage' means a 
consumer credit transaction secured by the consumer's principal 
residence with a fixed interest rate for an introductory period that 
adjusts or resets to a variable interest rate after such period.
    ``(b) Notice of Reset and Alternatives.--During the 1-month period 
that ends 6 months before the date on which the interest rate in effect 
during the introductory period of a hybrid adjustable rate mortgage 
adjusts or resets to a variable interest rate, the creditor or servicer 
of such loan shall provide a written notice, separate and distinct from 
all other correspondence to the consumer, that includes the following:
            ``(1) Any index or formula used in making adjustments to or 
        resetting the interest rate and a source of information about 
        the index or formula.
            ``(2) An explanation of how the new interest rate and 
        payment would be determined, including an explanation of how 
        the index was adjusted, such as by the addition of a margin.
            ``(3) The best estimate of the creditor or servicer of the 
        amount of the monthly payment that will apply after the date of 
        the adjustment or reset, and the assumptions on which this 
        estimate is based.
            ``(4) A list of alternatives consumers may pursue before 
        the date of adjustment or reset, and descriptions of the 
        actions consumers must take to pursue these alternatives, 
        including--
                    ``(A) refinancing;
                    ``(B) renegotiation of loan terms;
                    ``(C) payment forebearances; and
                    ``(D) pre-foreclosure sales.
            ``(5) The names, addresses, telephone numbers, and Internet 
        addresses of counseling agencies or programs reasonably 
        available to the consumer that have been certified or approved 
        and made publicly available by the Secretary of Housing and 
        Urban Development or a State housing finance authority (as 
        defined in section 1301 of the Financial Institutions Reform, 
        Recovery, and Enforcement Act of 1989).
            ``(6) The address, telephone number, and Internet address 
        for the State housing finance authority (as so defined) for the 
        State in which the consumer resides.
    ``(c) Periodic Disclosures.--All periodic statements provided to a 
consumer by a creditor or servicer, whether paper or electronic, with 
respect to a hybrid adjustable rate mortgage shall include, in a clear 
and conspicuous manner, the date on which such mortgage adjusts or 
resets from a fixed interest rate during the introductory period to a 
variable rate.''.
    (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 128 the following new item:

``128A. Reset of hybrid adjustable rate mortgages.''.
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