Amendments to the Truth In Lending Act

The Truth In Lending Act (15 U.S.C. 1601 et seq.) is amended by inserting after section 129 the following new section:

129A.

Enhanced mortgage disclosures

(a)

Definitions

As used in this section, the term mortgage loan means any consumer credit transaction in which a security interest is or will be retained or acquired in any real property located in the United States which is or, upon completion of the transaction, will be used as the dwelling of the consumer. (b)

Disclosures for mortgage loans

Subject to the rules of the Board, with respect to a mortgage loan, the creditor shall disclose to the consumer, in addition to any other disclosures required under this title— (1)the amount of the loan; (2)the percentage of the loan, as compared to the appraised value of the property; (3)the term of the loan; (4)the monthly income of the borrower, as relied upon in making the loan; (5)if the annual percentage rate of interest is fixed— (A)the applicable annual percentage rate of interest for the loan; (B)the amount of the monthly payment on the loan; (C)an estimate of the monthly payment, plus taxes and insurance; and (D)the percentage of the stated monthly income of the borrower represented by the monthly payment, plus taxes and insurance; (6)if the annual percentage rate of interest is variable— (A)the initial interest rate; (B)the duration of the initial interest rate; (C)an estimate of the monthly payment amount associated with the initial interest rate; (D)an estimate of the monthly payment associated with the initial interest rate, plus taxes and insurance; (E)the percentage of the stated monthly income of the borrower represented by the estimated monthly payment associated with the initial interest rate, plus taxes and insurance; (F)the date on which the interest rate will be adjusted or reset; (G)the fully indexed rate (expressed as an estimate of the interest rate after it is adjusted or reset); (H)an estimate of the monthly payment amount associated with the fully indexed interest rate; (I)the percentage of the stated monthly income of the borrower represented by the estimated monthly payment associated with the fully indexed interest rate; (J)an estimate of the monthly payment associated with the fully indexed rate, plus taxes and insurance; and (K)an estimate of the maximum possible applicable annual percentage rate of interest, including language expressing that if there is no maximum rate, the applicable State usury rate shall be disclosed; (7)if the loan represents a subordinate lien (also referred to as a piggyback loan) on the real property securing the loan, a brief statement that the loan is subordinate to an existing primary lien, and that the amount of the loan and estimated monthly payments described in the disclosure are in addition to any amounts arising from existing loan obligations; (8)in any case in which a prepayment fee or penalty may be imposed with respect to the loan— (A)the amount of such fee or penalty; and (B)a brief description, in plain English, of the circumstances or events which would trigger the imposition of the prepayment fee or penalty; (9)in any case in which a balloon payment may be required with respect to the loan— (A)the date on which the balloon payment is due, and the estimated amount of the balloon payment; and (B)a brief statement, in plain English, that a balloon payment mortgage does not fully pay off the loan, that a large balloon payment of the remaining principal will be required at the end of the loan term, and that many borrowers must secure another loan to make the balloon payment; (10)if the borrower has a payment option loan— (A)a disclosure that the loan is a payment option loan; and (B)a brief statement, in plain English, that a payment option loan has negative amortization, which can result in the loan balance becoming higher than the original amount of the loan, even if the borrower makes all payments on time; (11)total points to be paid at closing, with an explanation that points are a fee that the borrower pays to the lender, expressed as a percentage of the total loan; and (12)the total actual closing costs, including points, if known, and if not known, the total estimated closing costs, including points. (c)

Timing of disclosures

The disclosures required by this section shall be provided to the consumer at the time of approval of the mortgage loan, but in no case later than 7 days before the date on which the mortgage loan is consummated. (d)

Format

Disclosures required by this section shall be presented to the consumer in the form and manner which the Board shall prescribe by regulation— (1)in a simple, clearly legible, and uniform tabular format, in accordance with subsection (e); (2)to the extent possible, as a one-page, single document; (3)when provided in conjunction with or at the same time as other required written disclosures, as the first of such documents; and (4)in an easily readable font size. (e)

Tabular format

(1)

In general

In the regulations prescribed under subsection (d)(1), the Board shall require that the disclosure of such information shall be in the form of a table, which— (A)contains clear and concise headings for each item of such information; and (B)provides a clear and concise form for stating each item of information required to be disclosed under each such heading. (2)

Board discretion in prescribing order and wording of table

In prescribing the form of the table under paragraph (1), the Board may— (A)list the items required to be included in the table in a different order than the order in which such items are set forth in subsection (b); and (B)employ terminology which is different from the terminology employed in subsection (b), if such terminology conveys substantially the same meaning. (f)

Rules for reduction of time limit of disclosure requirements to 24 hours

The Board shall, by rule, provide for procedures to reduce the time limit described in subsection (c) to 24 hours prior to the consummation of the mortgage, to the extent that the Board determines necessary and appropriate, except that such rules shall provide for a time limit reduction only at the request of the borrower, and only in those limited circumstances in which the borrower needs to consummate the mortgage transaction in a more expedited manner than would otherwise be permitted under this section. (g)

Tolerances for accuracy

The provisions of section 106(f), relating to tolerances for accuracy, and any rules of the Board issued under that subsection, shall apply to disclosures required under this section.