In this Act, the following
definitions shall apply:
(1) The term “adjustable
rate mortgage” means a residential mortgage that has an interest
rate that is subject to change. 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.
(2) The
term “cancellation date” means—
(A) with respect to a fixed rate mortgage,
at the option of the mortgagor, the date on which the principal balance
of the mortgage—
(i) based solely on the initial amortization
schedule for that mortgage, and irrespective of the outstanding balance
for that mortgage on that date, is first scheduled to reach 80 percent
of the original value of the property securing the loan; or
(ii) based solely on actual
payments, reaches 80 percent of the original value of the property
securing the loan; and
(B) with respect to an adjustable rate
mortgage, at the option of the mortgagor, the date on which the principal
balance of the mortgage—
(i) based solely on the amortization
schedule then in effect for that mortgage, and irrespective of the
outstanding balance for that mortgage on that date, is first scheduled
to reach 80 percent of the original value of the property securing
the loan; or
(ii)
based solely on actual payments, first reaches 80 percent of the original
value of the property securing the loan.
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(3) The term “fixed rate mortgage” means a residential
mortgage that has an interest rate that is not subject to change.
(4) The term “good payment history” means,
with respect to a mortgagor, that the mortgagor has not—
(A) made a mortgage payment that was 60
days or longer past due during the 12-month period beginning 24 months
before the later of (i) the date on which the mortgage reaches the
cancellation date or (ii) the date that the mortgagor submits a request
for cancellation under section 3(a)(1); or
(B) made a mortgage payment that was 30
days or longer past due during the 12-month period preceding the later
of (i) the date on which the mortgage reaches the cancellation date
or (ii) the date that the mortgagor submits a request for cancellation
under section 3(a)(1).
(5) The term “initial amortization schedule” means a schedule established at
the time at which a residential mortgage transaction is consummated
with respect to a fixed rate mortgage, showing—
(A) the amount of principal and interest
that is due at regular intervals to retire the principal balance and
accrued interest over the amortization period of the loan; and
(B) the unpaid principal
balance of the loan after each scheduled payment is made.
(6) 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.
(7) 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.
(8) The term “mortgage insurance” means insurance, including any mortgage guaranty
insurance, against the nonpayment of, or default on, an individual
mortgage or loan involved in a residential mortgage transaction.
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(9) The term “mortgage insurer” means a provider
of private mortgage insurance, as described in this Act, that is authorized
to transact such business in the State in which the provider is transacting
such business.
(10) The term “mortgagee” means the holder of a residential mortgage at the time at which
that mortgage transaction is consummated.
(11)
The term “mortgagor” means the original borrower under a residential
mortgage or his or her successors or assignees.
(12) The term “original value”, with respect to a residential
mortgage transaction, means the lesser of the sales price of the property
securing the mortgage, as reflected in the contract, or the appraised
value at the time at which the subject residential mortgage transaction
was consummated. 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.
(13) The term “private
mortgage insurance” means mortgage insurance other than mortgage
insurance made available under the National Housing Act, title 38
of the United States Code, or title V of the Housing Act of 1949.
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(14) The term “residential mortgage” means a mortgage,
loan, or other evidence of a security interest created with respect
to a single-family dwelling that is the principal residence of the
mortgagor.
(15) The term “residential mortgage
transaction” means a transaction consummated on or after the date
that is 1 year after the date of enactment of this Act, in which a
mortgage, deed of trust, purchase money security interest arising
under an installment sales contract, or equivalent consensual security
interest is created or retained against a single-family dwelling that
is the principal residence of the mortgagor to finance the acquisition,
initial construction, or refinancing of that dwelling.
(16) The term “servicer” has the same meaning as
in section 6(i)(2) of the Real Estate Settlement Procedures Act of
1974, with respect to a residential mortgage.
(17)
The term “single-family dwelling” means a residence consisting
of 1 family dwelling unit.
(18) The term “termination
date” means—
(A) with respect to a fixed rate mortgage,
the date on which the principal balance of the mortgage, based solely
on the initial amortization schedule for that mortgage, and irrespective
of the outstanding balance for that mortgage on that date, is first
scheduled to reach 78 percent of the original value of the property
securing the loan; and
(B) with respect to an adjustable rate mortgage, the date on which
the principal balance of the mortgage, based solely on the amortization
schedule then in effect for that mortgage, and irrespective of the
outstanding balance for that mortgage on that date, is first scheduled
to reach 78 percent of the original value of the property securing
the loan.
[12 USC 4901. As amended
by act of Dec. 27, 2000 (114 Stat. 2956, 2958, 2959).]
