An amendment numbered 18 printed in House Report 110-450 to require loan creditors or servicers to provide a written notice to consumers with hybrid adjustable rate mortgages six months before their interest rates are due to reset. This notice would state the new interest rate, an explanation of how the new interest rate would be determined, the creditor's or servicer's good faith estimate of the monthly payment that will apply after the reset, a list of alternatives consumers may pursue before the date of adjustment or reset, and contact information for local HUD-approved housing counseling agencies and the state housing finance authority.

1. Adds SEC. 212. 6-MONTH NOTICE REQUIRED BEFORE RESET OF HYBRID ADJUSTABLE RATE MORTGAGES after section 211

   Adds a section

   Inserted: SEC. 212. 6-MONTH NOTICE REQUIRED BEFORE RESET OF HYBRID ADJUSTABLE RATE MORTGAGES.

   Inserted: (a) In General.--Chapter 2 of the Truth in Lending Act (15 U.S.C. 1631 et seq.) is amended by inserting after section 128 the following new section:

   Inserted: "Sec. 128A. Reset of hybrid adjustable rate mortgages

   Inserted: "(a) Hybrid Adjustable Rate Mortgages Defined.--For purposes of this section, the term 'hybrid adjustable rate mortgage' means a consumer credit transaction secured by the consumer's principal residence with a fixed interest rate for an introductory period that adjusts or resets to a variable interest rate after such period.

   Inserted: "(b) Notice of Reset and Alternatives.--During the 1-month period that ends 6 months before the date on which the interest rate in effect during the introductory period of a hybrid adjustable rate mortgage adjusts or resets to a variable interest rate, the creditor or servicer of such loan shall provide a written notice, separate and distinct from all other correspondence to the consumer, that includes the following:

   Inserted: "(1) Any index or formula used in making adjustments to or resetting the interest rate and a source of information about the index or formula.

   Inserted: "(2) An explanation of how the new interest rate and payment would be determined, including an explanation of how the index was adjusted, such as by the addition of a margin.

   Inserted: "(3) A good faith estimate, based on accepted industry standards, of the creditor or servicer of the amount of the monthly payment that will apply after the date of the adjustment or reset, and the assumptions on which this estimate is based.

   Inserted: "(4) A list of alternatives consumers may pursue before the date of adjustment or reset, and descriptions of the actions consumers must take to pursue these alternatives, including--

   Inserted: "(A) refinancing;

   Inserted: "(B) renegotiation of loan terms;

   Inserted: "(C) payment forbearances; and

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   Inserted: "(D) pre-foreclosure sales.

   Inserted: "(5) The names, addresses, telephone numbers, and Internet addresses of counseling agencies or programs reasonably available to the consumer that have been certified or approved and made publicly available by the Secretary of Housing and Urban Development or a State housing finance authority (as defined in section 1301 of the Financial Institutions Reform, Recovery, and Enforcement Act of 1989).

   Inserted: "(6) The address, telephone number, and Internet address for the State housing finance authority (as so defined) for the State in which the consumer resides.".

   Inserted: (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 128 the following new item:

   Inserted: "128A. Reset of hybrid adjustable rate mortgages.".

   Original wording

   After section 211, insert the following new section (and redesignate the subsequent sections accordingly):

Read automatically from the Congressional Record. Check the original before relying on it.

As printed