12 U.S.C. § 3802

Definitions

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As used in this chapter—(1) the term “alternative mortgage transaction” means a loan or credit sale secured by an interest in residential real property, a dwelling, all stock allocated to a dwelling unit in a residential cooperative housing corporation, or a residential manufactured home (as that term is defined in section 5402(6) of title 42), in which the interest rate or finance charge may be adjusted or renegotiated, described and defined by applicable regulation; and(2) the term “housing creditor” means—(A) a depository institution, as defined in section 501(a)(2) of the Depository Institutions Deregulation and Monetary Control Act of 1980;(B) a lender approved by the Secretary of Housing and Urban Development for participation in any mortgage insurance program under the National Housing Act [12 U.S.C. 1701 et seq.];(C) any person who regularly makes loans, credit sales, or advances secured by interests in properties referred to in paragraph (1); or(D) any transferee of any of them.A person is not a “housing creditor” with respect to a specific alternative mortgage transaction if, except for this chapter, in order to enter into that transaction, the person would be required to comply with licensing requirements imposed under State law, unless such person is licensed under applicable State law and such person remains, or becomes, subject to the applicable regulatory requirements and enforcement mechanisms provided by State law.(Pub. L. 97–320, title VIII, § 803, Oct. 15, 1982, 96 Stat. 1545; Pub. L. 111–203, title X, § 1083(a)(1), July 21, 2010, 124 Stat. 2080.)Editorial NotesReferences in Text

Section 501(a)(2) of the Depository Institutions Deregulation and Monetary Control Act of 1980, referred to in par. (2)(A), is section 501(a)(2) of Pub. L. 96–221, title V, Mar. 31, 1980, 94 Stat. 161, which is set out as a note under section 1735f–7 of this title.

The National Housing Act, referred to in par. (2)(B), is act June 27, 1934, ch. 847, 48 Stat. 1246, which is classified principally to chapter 13 (§ 1701 et seq.) of this title. For complete classification of this Act to the Code, see section 1701 of this title and Tables.

Amendments

2010—Par. (1). Pub. L. 111–203 substituted “section 5402(6) of title 42), in which the interest rate or finance charge may be adjusted or renegotiated, described and defined by applicable regulation; and” for “section 5402(6) of title 42)—

“(A) in which the interest rate or finance charge may be adjusted or renegotiated;

“(B) involving a fixed-rate, but which implicitly permits rate adjustments by having the debt mature at the end of an interval shorter than the term of the amortization schedule; or

“(C) involving any similar type of rate, method of determining return, term, repayment, or other variation not common to traditional fixed-rate, fixed-term transactions, including without limitation, transactions that involve the sharing of equity or appreciation;

described and defined by applicable regulation; and”.

Statutory Notes and Related SubsidiariesEffective Date of 2010 Amendment

Pub. L. 111–203, title X, § 1083(b), July 21, 2010, 124 Stat. 2081, provided that: “This section [amending this section and section 3803 of this title and enacting provisions set out as a note under this section] and the amendments made by this section shall become effective on the designated transfer date.”

[For definition of “designated transfer date”, see section 5481 of this title.]

Effective Date

Section effective Oct. 15, 1982, see section 807(a) of Pub. L. 97–320, set out as a note under section 3801 of this title.

Construction of 2010 Amendment

Pub. L. 111–203, title X, § 1083(c), July 21, 2010, 124 Stat. 2081, provided that: “The amendments made by subsection (a) [amending this section and section 3803 of this title] shall not affect any transaction covered by the Alternative Mortgage Transaction Parity Act of l982 (12 U.S.C. 3801 et seq.) and entered into on or before the designated transfer date.”

[For definition of “designated transfer date”, see section 5481 of this title.]

Notes of Decisions

Cited in 26 cases, 1993–2010 · leading case: Black v. Fin. Freedom Senior Funding Corp., 2001 Cal. Daily Op. Serv. 8676 (Cal. Ct. App. 2001).

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Black v. Fin. Freedom Senior Funding Corp., 2001 Cal. Daily Op. Serv. 8676 (Cal. Ct. App. 2001). · cites it 5× “” ( 12 U.S.C. § 3802 (2).) Here, for example, certain housing creditors in California are required to be licensed under the California Finance Lenders Law (see Fin.”

First Gibraltar Bank, Fsb, & Beneficial Texas, Inc. v. Dan Morales, Atty. Gen., as Attorney Gen. for the State of Texas, 19 F.3d 1032 (1st Cir. 1994). · cites it 4× “12 U.S.C. § 3802 (2)(C). State chartered housing creditors that are neither banks nor credit unions are authorized to engage in AMT lending in accordance with OTS regulations governing such transactions in the federal savings association context.”

Turner Ansley v. Ameriquest Mortg. Co., 340 F.3d 858 (9th Cir. 2003). · cites it 2× “Governing Law Provision This Note and the related Security Interest are governed by the Alternative Mortgage Transaction Parity Act of 1982, 12 USC § 3802 et. seq., and, to the extent not inconsistent therewith, Federal and State law applicable to the jurisdiction of the…”

Nat'l Home Equity Mortg. Ass'n v. Face, 239 F.3d 633 (4th Cir. 2001). · cites it 3× “” Parity Act, § 803(1), 12 U.S.C. § 3802 (1). The practical effect of the statutory scheme is to permit a non-federally chartered housing creditor to make a loan either under state law, in which case the *636 loan transaction remains subject to the full range of state…”

Shinn v. Encore Mortg. Servs., Inc., 96 F. Supp. 2d 419 (D.N.J. 2000). · cites it 6× “12 U.S.C. § 3802 (1). 3 Although OCC, NCUA, and FHLBB regulations allowed federal lenders to engage in alternative mortgage transactions (“AMTs”), many states had laws which prevented state chartered lenders from engaging in AMTs.”

Thomas W. McCarthy v. Option One Mortg. Corp. & Bnc Mortg., Inc., 362 F.3d 1008 (7th Cir. 2004). · cites it 2× “12 U.S.C. § 3802 (1). 1 Although federally chartered lenders were previously permitted to issue alternative mortgages, many states had laws prohibiting state-chartered lenders from providing this type of credit.”

Illinois Ass'n of Mortg. Brokers v. Off. of Banks & Real Est. & William A. Darr, 308 F.3d 762 (7th Cir. 2002). “What Chicago is getting at is that states might make compliance with substantive rules (such as “no balloon payments before 15 years”) a condition of obtaining a license; and an unlicensed lender can’t take advantage of the preemption clause.”

Quicken Loans, Inc. v. Wood, 449 F.3d 944 (9th Cir. 2006). · cites it 3× “”); 12 U.S.C. § 3802 (2) (requiring housing creditors to be “licensed under applicable State law” and “subject to the applicable regulatory requirements and enforcement mechanisms provided by State law”).”

Robert & Jennifer Grunbeck v. The Dime Sav. Bank of New York, Fsb, 74 F.3d 331 (1st Cir. 1996). “12 U.S.C. § 3802 (1). 11 . The court explained that “negative amortization provisions are not the only characteristics that qualify a loan as an alternative mortgage transaction,” and, further, that “[s]imple interest laws are merely one of several categories of" state laws…”

Nat'l Home Equity Mortg. Ass'n v. Face, 64 F. Supp. 2d 584 (E.D. Va. 1999). · cites it 2× “” 12 U.S.C. §§ 3802 (2)(C)-(D). 2 . An alternative mortgage transaction "means a loan or credit sale secured by an interest in residential real property, a dwelling, all stock allocated to a dwelling unit in a residential cooperative housing corporation, or a residential…”

Williams v. Gelt Fin. Corp., 237 B.R. 590 (E.D. Pa. 1999). “12 U.S.C. § 3802 (1). Gelt refers us to a regulation promulgated by the Office of Thrift Supervision which reads: “Any prepayment on a real estate loan must be applied directly to reduce the principal balance on the loan unless the loan contract or the borrower specifies…”

Williams v. Gelt Fin. Corp. (In Re Williams), 232 B.R. 629 (Bankr. E.D. Pa. 1999). “See 12 U.S.C. § 3802 (1) The Defendant finally argues that, since the Regulations of the Office of Thrift Supervision (“OTS”) govern this type of mortgage, the penalties in question were permissible because they are specifically allowed by the federal regulatory scheme.”

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