article: SECTION 1. SHORT TITLE. This Act may be cited as the ``Private Mortgage Insurance Technical Corrections and Clarification Act''. SEC. 2. CHANGES IN AMORTIZATION SCHEDULE. (a) Treatment of Adjustable Rate Mortgages.--The Homeowners Protection Act of 1998 (12 U.S.C. 4901 et seq.) is amended-- (1) in section 2-- (A) in paragraph (2)(B)(i), by striking ``amortization schedules'' and inserting ``the amortization schedule then in effect''; (B) in paragraph (16)(B), by striking ``amortization schedules'' and inserting ``the amortization schedule then in effect''; (C) by redesignating paragraphs (6) through (16) (as amended by the preceding provisions of this paragraph) as paragraphs (8) through (18), respectively; and (D) by inserting after paragraph (5) the following new paragraph: ``(6) Amortization schedule then in effect.--The term `amortization schedule then in effect' means, with respect to an adjustable rate mortgage, a schedule established at the time at which the residential mortgage transaction is consummated or, if such schedule has been changed or recalculated, is the most recent schedule under the terms of the note or mortgage, which shows-- ``(A) the amount of principal and interest that is due at regular intervals to retire the principal balance and accrued interest over the remaining amortization period of the loan; and ``(B) the unpaid balance of the loan after each such scheduled payment is made.''; and (2) in section 3(f)(1)(B)(ii), by striking ``amortization schedules'' and inserting ``the amortization schedule then in effect''. (b) Treatment of Balloon Mortgages.--Paragraph (1) of section 2 of the Homeowners Protection Act of 1998 (12 U.S.C. 4901(1)) is amended by adding at the end the following new sentence: ``A residential mortgage that (A) does not fully amortize over the term of the obligation, and (B) contains a conditional right to refinance or modify the unamortized principal at the maturity date of the term, shall be considered to be an adjustable rate mortgage for purposes of this Act.''. (c) Treatment of Loan Modifications.-- (1) In general.--Section 3 of the Homeowners Protection Act of 1998 (12 U.S.C. 4902) is amended-- (A) by redesignating subsections (d) through (f) as subsections (e) through (g), respectively; and (B) by inserting after subsection (c) the following new subsection: ``(d) Treatment of Loan Modifications.--If a mortgagor and mortgagee (or holder of the mortgage) agree to a modification of the terms or conditions of a loan pursuant to a residential mortgage transaction, the cancellation date, termination date, or final termination shall be recalculated to reflect the modified terms and conditions of such loan.''. (2) Conforming amendments.--Section 4(a) of the Homeowners Protection Act of 1998 (12 U.S.C. 4903(a)) is amended-- (A) in paragraph (1)-- (i) in the matter preceding subparagraph (A), by striking ``section 3(f)(1)'' and inserting ``section 3(g)(1)''; (ii) in subparagraph (A)(ii)(IV), by striking ``section 3(f)'' and inserting ``section 3(g)''; and (iii) in subparagraph (B)(iii), by striking ``section 3(f)'' and inserting ``section 3(g)''; and (B) in paragraph (2), by striking ``section 3(f)(1)'' and inserting ``section 3(g)(1)''. SEC. 3. DELETION OF AMBIGUOUS REFERENCES TO RESIDENTIAL MORTGAGES. (a) Termination of Private Mortgage Insurance.--Section 3 of the Homeowners Protection Act of 1998 (12 U.S.C. 4902) is amended-- (1) in subsection (c), by inserting ``on residential mortgage transactions'' after ``imposed''; and (2) in subsection (g) (as so redesignated by section 2(c)(1)(A) of this Act)-- (A) in paragraph (1), in the matter preceding subparagraph (A), by striking ``mortgage or''; (B) in paragraph (2), by striking ``mortgage or''; and (C) in paragraph (3), by striking ``mortgage or'' and inserting ``residential mortgage or residential''. (b) Disclosure Requirements.--Section 4 of the Homeowners Protection Act of 1998 (12 U.S.C. 4903(a)) is amended-- (1) in subsection (a)-- (A) in paragraph (1)-- (i) by striking ``mortgage or'' the first place it appears; and (ii) by striking ``mortgage or'' the second place it appears and inserting ``residential''; and (B) in paragraph (2), by striking ``mortgage or'' and inserting ``residential''; (2) in subsection (c), by striking ``paragraphs (1)(B) and (3) of subsection (a)'' and inserting ``subsection (a)(3)''; and (3) in subsection (d), by inserting before the period at the end the following: ``, which disclosures shall relate to the mortgagor's rights under this Act''. (c) Disclosure Requirements for Lender-Paid Mortgage Insurance.-- Section 6 of the Homeowners Protection Act of 1998 (12 U.S.C. 4905) is amended-- (1) in subsection (c)-- (A) in the matter preceding paragraph (1), by striking ``a residential mortgage or''; and (B) in paragraph (2), by inserting ``transaction'' after ``residential mortgage''; and (2) in subsection (d), by inserting ``transaction'' after ``residential mortgage''. SEC. 4. CANCELLATION RIGHTS AFTER CANCELLATION DATE. Section 3 of the Homeowners Protection Act of 1998 (12 U.S.C. 4902) is amended-- (1) in subsection (a)-- (A) in the matter preceding paragraph (1), by inserting after ``cancellation date'' the following: ``or any later date that the mortgagor fulfills all of the requirements under paragraphs (1) through (4)''; (B) in paragraph (2), by striking ``and'' at the end; (C) by redesignating paragraph (3) as paragraph (4); and (D) by inserting after paragraph (2) the following new paragraph: ``(3) is current on the payments required by the terms of the residential mortgage transaction; and''; and (2) in subsection (e)(1)(B) (as so redesignated by section 2(c)(1)(A) of this Act), by striking ``subsection ``(a)(3)'' and inserting ``subsection (a)(4)''. SEC. 5. CLARIFICATION OF CANCELLATION AND TERMINATION ISSUES AND LENDER PAID MORTGAGE INSURANCE DISCLOSURE REQUIREMENTS. (a) Good Payment History.--Section 2(4) of the Homeowners Protection Act of 1998 (12 U.S.C. 4901(4)) is amended-- (1) in subparagraph (A)-- (A) by inserting ``the later of (i)'' before ``the date''; and (B) by inserting ``, or (ii) the date that the mortgagor submits a request for cancellation under section 3(a)(1)'' before the semicolon; and (2) in subparagraph (B)-- (A) by inserting ``the later of (i)'' before ``the date''; and (B) by inserting ``, or (ii) the date that the mortgagor submits a request for cancellation under section 3(a)(1)'' before the period at the end. (b) Automatic Termination.--Paragraph (2) of section 3(b) of the Homeowners Protection Act of 1998 (12 U.S.C. 4902(b)(2)) is amended to read as follows: ``(2) if the mortgagor is not current on the termination date, on the first day of the first month beginning after the date that the mortgagor becomes current on the payments required by the terms of the residential mortgage transaction.''. (c) Premium Payments.--Section 3 of the Homeowners Protection Act of 1998 (12 U.S.C. 4902) is amended by adding at the end the following new subsection: ``(h) Accrued Obligation for Premium Payments.--The cancellation or termination under this section of the private mortgage insurance of a mortgagor shall not affect the rights of any mortgagee, servicer, or mortgage insurer to enforce any obligation of such mortgagor for premium payments accrued prior to the date on which such cancellation or termination occurred.''. SEC. 6. DEFINITIONS. (a) Refinanced.--Section 6(c)(1)(B)(ii) of the Homeowners Protection Act of 1998 (12 U.S.C. 4905(c)(1)(B)(ii)) is amended by inserting after ``refinanced'' the following: ``(under the meaning given such term in the regulations issued by the Board of Governors of the Federal Reserve System to carry out the Truth in Lending Act (15 U.S.C. 1601 et seq.))''. (b) Midpoint of the Amortization Period.--Section 2 of the Homeowners Protection Act of 1998 (12 U.S.C. 4901) is amended by inserting after paragraph (6) (as added by section 2(a)(1)(D) of this Act) the following new paragraph: ``(7) Midpoint of the amortization period.--The term ``midpoint of the amortization period'' means, with respect to a residential mortgage transaction, the point in time that is halfway through the period that begins upon the first day of the amortization period established at the time a residential mortgage transaction is consummated and ends upon the completion of the entire period over which the mortgage is scheduled to be amortized.''. (c) Original Value.--Section 2(12) of the Homeowners Protection Act of 1998 (12 U.S.C. 4901(10)) (as so redesignated by section 2(a)(1)(C) of this Act) is amended-- (1) by inserting ``transaction'' after ``a residential mortgage''; and (2) by adding at the end the following new sentence: ``In the case of a residential mortgage transaction for refinancing the principal residence of the mortgagor, such term means only the appraised value relied upon by the mortgagee to approve the refinance transaction.''. (d) Principal Residence.--Section 2 of the Homeowners Protection Act of 1998 (12 U.S.C. 4901) is amended-- (1) in paragraph (14) (as so redesignated by section 2(a)(1)(C) of this Act) by striking ``primary'' and inserting ``principal''; and (2) in paragraph (15) (as so redesignated by section 2(a)(1)(C) of this Act) by striking ``primary'' and inserting ``principal''. Passed the House of Representatives May 23, 2000. Attest: JEFF TRANDAHL, Clerk.
summary: Includes balloon mortgages within the definition of "adjustable rate mortgages." States that if a residential mortgage loan is modified (with mortgagor-mortgagee agreement) the cancellation date, termination date, or final agreement shall be recalculated to reflect such modifications. (Sec. 4) Extends mortgage insurance cancellation rights beyond the cancellation date for a qualifying borrower who is current on required payments. (Sec. 5) Revises the automatic termination date with respect to a mortgagor who is not current on payments as of the mortgage termination date. States that the cancellation or termination of private mortgage insurance shall not affect the rights of any mortgagee, servicer, or insurer to enforce any accrued obligation for premium payments. (Sec. 6) Revises specified definitions.