110 HR 3705 IH: To amend the Truth in Lending Act to require notice to U.S. House of Representatives 2007-09-27 text/xml EN Pursuant to Title 17 Section 105 of the United States Code, this file is not subject to copyright protection and is in the public domain.

I 110th CONGRESS 1st Session H. R. 3705 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.

1.

Short title

This Act may be cited as the Fair Disclosure for Homeowners Act of 2007.

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:

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. .