110 HR 3894 IH: Negative Amortization Mortgage Loan U.S. House of Representatives 2007-10-18 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. 3894 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.

1.

Short title

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

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:

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. .