12 U.S.C. §4905 — Disclosure requirements for lender paid mortgage insurance
HPA lender-paid mortgage insurance (LPMI) section. Definitions of borrower-paid PMI, lender-paid PMI, and loan commitment; statutory exclusion of LPMI from §§4902-4904 cancellation/ termination/notification framework; loan-commitment LPMI disclosure (differences from BPMI, higher-rate effect, refinance- only termination, cost-benefit analysis); 30-day post-notional- termination refinance-options notice.
Verbatim regulatory text
Verbatim provisions from 12 U.S.C. §4905 — Disclosure requirements for lender paid mortgage insurance — each quote is a verified substring of the regulator-published source snapshot, not retyped. Quoted for reference; this is not legal advice. The operational layer (P&P updates, prompts) lives in the regulation update kits.
12 U.S.C. §4905(a)
(a) Definitions For purposes of this section— (1) the term “ borrower paid mortgage insurance ” means private mortgage insurance that is required in connection with a residential mortgage transaction, payments for which are made by the borrower; (2) the term “ lender paid mortgage insurance ” means private mortgage insurance that is required in connection with a residential mortgage transaction, payments for which are made by a person other than the borrower; and (3) the term “ loan commitment ” means a prospective mortgagee’ s written confirmation of its approval, including any applicable closing conditions, of the application of a prospective mortgagor for a residential mortgage loan.
12 U.S.C. §4905(b)
(b) Exclusion Sections 4902 through 4904 of this title do not apply in the case of lender paid mortgage insurance .
12 U.S.C. §4905(c)
(c) Notices to mortgagor In the case of lender paid mortgage insurance that is required in connection with a residential mortgage transaction— (1) not later than the date on which a loan commitment is made for the residential mortgage transaction, the prospective mortgagee shall provide to the prospective mortgagor a written notice— (A) that lender paid mortgage insurance differs from borrower paid mortgage insurance , in that lender paid mortgage insurance may not be canceled by the mortgagor, while borrower paid mortgage insurance could be cancelable by the mortgagor in accordance with section 4902(a) of this title , and could automatically terminate on the termination date in accordance with section 4902(b) of this title ; (B) that lender paid mortgage insurance —
12 U.S.C. §4905(i)
(i) usually results in a residential mortgage having a higher interest rate than it would in the case of borrower paid mortgage insurance ; and (ii) terminates only when the residential mortgage is refinanced (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.)), paid off, or otherwise terminated; and (C) that lender paid mortgage insurance and borrower paid mortgage insurance both have benefits and disadvantages, including a generic analysis of the differing costs and benefits of a residential mortgage in the case lender paid mortgage insurance versus borrower paid mortgage insurance over a 10-year period, assuming prevailing interest and property appreciation rates; (D) that lender paid mortgage insurance may be tax-deductible for purposes of Federal income taxes, if the mortgagor itemizes expenses for that purpose; and (2) not later than 30 days after the termination date that would apply in the case of borrower paid mortgage insurance , the servicer shall provide to the mortgagor a written notice indicating that the mortgagor may wish to review financing options that could eliminate the requirement for private mortgage insurance in connection with the residential mortgage transaction.
12 U.S.C. §4905(d)
(d) Standard forms The servicer of a residential mortgage transaction may develop and use a standardized form or forms for the provision of notices to the mortgagor, as required under subsection (c). ( Pub. L. 105–216, § 6 , July 29, 1998 , 112 Stat. 904 ; Pub. L. 106–569, title IV , §§ 403(c), 406(a), Dec. 27, 2000 , 114 Stat. 2957 , 2959.)
Operationalizing 12 U.S.C. §4905 — Disclosure requirements for lender paid mortgage insurance
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Source of record: https://claudeforcompliance.com/regs/hpa-12usc-4905/
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