To enhance mortgage loan disclosure requirements with additional safeguards for adjustable rate mortgages with an initial fixed rate and loans that contain a prepayment penalty.

SA 4987. Mr. BOND proposed an amendment to amendment SA 4983 proposed
by Mr. Reid (for Mr. Dodd (for himself and Mr. Shelby)) to the bill
H.R. 3221, moving the United States toward greater energy independence
and security, developing innovative new technologies, reducing carbon
emissions, creating green jobs, protecting consumers, increasing clean
renewable energy production, and modernizing our energy infrastructure,
and to amend the Internal Revenue Code of 1986 to provide tax
incentives for the production of renewable energy and energy
conservation; as follows:

On page 522, between lines 2 and 3, insert the following:
``(iii) If the loan is an adjustable rate mortgage that
includes an initial fixed interest rate--

``(I) state in conspicuous type size and format the
following phrase: This loan is an adjustable rate mortgage
with an initial fixed interest rate. Your initial fixed
interest rate is AAA with a monthly payment of BBB until CCC.
After that date, the interest rate on your loan will `reset'
to an adjustable rate and both your interest rate and payment
could go higher on that date and in the future. For example,
if your initial fixed rate ended today, your new adjustable
interest rate would be DDD and your new payment EEE. If
interest rates are one percent higher than they are today or
at some point in the future, your new payment would be FFF.
There is no guarantee you will be able to refinance your loan
to a lower interest rate and payment before your initial
fixed interest rate ends.;
``(II) the blank AAA in subparagraph (I) to be filled in
with the initial fixed interest rate;
``(III) the blank BBB in subparagraph (I) to be filled in
with the payment amount under the initial fixed interest
rate;
``(IV) the blank CCC in subparagraph (I) to be filled in
with the loan reset date;
``(V) the blank DDD in subparagraph (I) to be filled in
with the adjustable rate as if the initial rate expired on
the date of disclosure under subparagraph (B);
``(VI) the blank EEE in subparagraph (I) to be filled in
with the payment under the adjustable rate as if the initial
rate expired on the date of disclosure under subparagraph
(B); and
``(VII) the blank FFF in subparagraph (I) to be filled in
with the payment under the adjustable rate

``(iv) If the loan contains a prepayment penalty--

``(I) state in conspicuous type and format the following
phrase: This loan contains a prepayment penalty. If you
desire to pay off this loan before GGG, you will pay a
penalty of HHH.;
``(II) the blank GGG in subparagraph (I) to be filled in
with the date the prepayment penalty expires; and
``(III) the blank HHH in subparagraph (I) to be filled in
with the prepayment penalty amount.

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