text: 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.
target: 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.
feat_title: Private Mortgage Insurance Technical Corrections and Clarification Act