2012 US Code
Title 12 - Banks and Banking
Chapter 13 - NATIONAL HOUSING (§§ 1701 - 1750jj)
Subchapter II - MORTGAGE INSURANCE (§§ 1707 - 1715z-25)
Section 1715z-16 - Adjustable rate single family mortgages
Publication Title | United States Code, 2012 Edition, Title 12 - BANKS AND BANKING |
Category | Bills and Statutes |
Collection | United States Code |
SuDoc Class Number | Y 1.2/5: |
Contained Within | Title 12 - BANKS AND BANKING CHAPTER 13 - NATIONAL HOUSING SUBCHAPTER II - MORTGAGE INSURANCE Sec. 1715z-16 - Adjustable rate single family mortgages |
Contains | section 1715z-16 |
Date | 2012 |
Laws in Effect as of Date | January 15, 2013 |
Positive Law | No |
Disposition | standard |
Source Credit | June 27, 1934, ch. 847, title II, §251, as added Pub. L. 98-181, title I [title IV, §443], Nov. 30, 1983, 97 Stat. 1225; amended Pub. L. 100-242, title IV, §415(a), Feb. 5, 1988, 101 Stat. 1907; Pub. L. 107-73, title II, §206, Nov. 26, 2001, 115 Stat. 674; Pub. L. 108-186, title III, §301(a), Dec. 16, 2003, 117 Stat. 2692. |
Statutes at Large References | 82 Stat. 146 97 Stat. 1225 101 Stat. 1907 115 Stat. 674 117 Stat. 2692 |
Public Law References | Public Law 90-321, Public Law 98-181, Public Law 100-242, Public Law 107-73, Public Law 108-186 |
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The Secretary may insure under any provision of this subchapter a mortgage involving property upon which there is located a dwelling designed principally for occupancy by one to four families, where the mortgage provides for periodic adjustments by the mortgagee in the effective rate of interest charged. Such interest rate adjustments may be accomplished through adjustments in the monthly payment amount, the outstanding principal balance, or the mortgage term, or a combination of these factors, except that in no case may any extension of a mortgage term result in a total term in excess of 40 years. Adjustments in the effective rate of interest shall correspond to a specified national interest rate index approved in regulations by the Secretary, information on which is readily accessible to mortgagors from generally available published sources. Adjustments in the effective rate of interest shall (1) be made on an annual basis; (2) be limited, with respect to any single interest rate increase, to no more than 1 percent on the outstanding loan balance; and (3) be limited to a maximum increase of 5 percentage points above the initial contract interest rate over the term of the mortgage.
(b) Written explanation of mortgage featuresThe Secretary shall require that the mortgagee make available to the mortgagor, at the time of loan application, a written explanation of the features of an adjustable rate mortgage consistent with the disclosure requirements applicable to variable rate mortgages secured by a principal dwelling under the Truth in Lending Act [15 U.S.C. 1601 et seq.].
(c) Number of mortgages and loansThe aggregate number of mortgages and loans insured under this section in any fiscal year may not exceed 30 percent of the aggregate number of mortgages and loans insured by the Secretary under this subchapter during the preceding fiscal year.
(d) Adjustable rate mortgage with initial fixed rate of interest(1) The Secretary may insure under this subsection a mortgage that meets the requirements of subsection (a) of this section, except that the effective rate of interest—
(A) shall be fixed for a period of not less than the first 3 years of the mortgage term;
(B) shall be adjusted by the mortgagee initially upon the expiration of such period and annually thereafter; and
(C) in the case of the initial interest rate adjustment, is subject to the 1 percent limitation only if the interest rate remained fixed for 3 or fewer years.
(2) The disclosure required under subsection (b) of this section shall be required for a mortgage insured under this subsection.
(June 27, 1934, ch. 847, title II, §251, as added Pub. L. 98–181, title I [title IV, §443], Nov. 30, 1983, 97 Stat. 1225; amended Pub. L. 100–242, title IV, §415(a), Feb. 5, 1988, 101 Stat. 1907; Pub. L. 107–73, title II, §206, Nov. 26, 2001, 115 Stat. 674; Pub. L. 108–186, title III, §301(a), Dec. 16, 2003, 117 Stat. 2692.)
References in TextThe Truth in Lending Act, referred to in subsec. (b), is title I of Pub. L. 90–321, May 29, 1968, 82 Stat. 146, as amended, which is classified generally to subchapter I (§1601 et seq.) of chapter 41 of Title 15, Commerce and Trade. For complete classification of this Act to the Code, see Short Title note set out under section 1601 of Title 15 and Tables.
Amendments2003—Subsec. (d)(1)(C). Pub. L. 108–186 substituted “3” for “five”
2001—Subsec. (b). Pub. L. 107–73, §206(1), substituted “require that the mortgagee make available to the mortgagor, at the time of loan application, a written explanation of the features of an adjustable rate mortgage consistent with the disclosure requirements applicable to variable rate mortgages secured by a principal dwelling under the Truth in Lending Act” for “issue regulations requiring that the mortgagee make available to the mortgagor, at the time of loan application, a written explanation of the features of the adjustable rate mortgage, including a hypothetical payment schedule that displays the maximum potential increases in monthly payments to the mortgagor over the first 5 years of the mortgage term”.
Subsec. (d). Pub. L. 107–73, §206(2), added subsec. (d).
1988—Subsec. (c). Pub. L. 100–242 amended subsec. (c) generally. Prior to amendment, subsec. (c) read as follows: “The aggregate number of mortgages and loans insured under this section, section 1715z–10(c) of this title, and section 1715z–17 of this title in any fiscal year may not exceed 10 percent of the aggregate number of mortgages and loans insured by the Secretary under this subchapter during the preceding fiscal year.”
Effective Date of 2003 AmendmentPub. L. 108–186, title III, §301(b), Dec. 16, 2003, 117 Stat. 2692, provided that: “The amendment made by subsection (a) [amending this section] shall apply to mortgages executed on or after the date of the enactment of this title [Dec. 16, 2003].”
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