by The Alternative Mortgage Transaction Parity Act (AMTPA) is a federal law that was enacted in 1982. The AMTPA was designed to provide parity for alternative mortgage transactions, such as adjustable rate mortgages (ARMs), with traditional fixed-rate mortgages. The law gives state-regulated institutions the same ability as federally-regulated institutions to make adjustable-rate mortgages and other alternative mortgage transactions.
The AMTPA preempts state laws that would otherwise limit or prohibit the making of alternative mortgage transactions by state-chartered depository institutions. This means that state-chartered depository institutions can offer alternative mortgage products, such as adjustable-rate mortgages, without being subject to state laws that might otherwise prohibit or limit such transactions.
The AMTPA also requires that state-chartered depository institutions disclose the terms and conditions of alternative mortgage transactions to consumers in a clear and conspicuous manner.
The law also requires state-chartered depository institutions to provide a written notice to the borrower at least three days before the first payment at the adjusted rate is due, and annually thereafter as long as the loan has an adjustable rate.
The AMTPA was repealed in 2011 by the Dodd-Frank Wall Street Reform and Consumer Protection Act. However, some of the provisions of AMTPA were incorporated into the Truth in Lending Act (TILA) as a result of the Dodd-Frank Act, which continues to govern the disclosure of alternative mortgage transactions.
The Alternative Mortgage Transaction Parity Act (AMTPA) had several provisions that provided parity for alternative mortgage transactions, such as adjustable rate mortgages (ARMs), with traditional fixed-rate mortgages. Some of the key provisions include:
- Preemption of state laws: The AMTPA preempts state laws that would otherwise limit or prohibit the making of alternative mortgage transactions by state-chartered depository institutions. This means that state-chartered depository institutions can offer alternative mortgage products, such as adjustable-rate mortgages, without being subject to state laws that might otherwise prohibit or limit such transactions.
- Disclosure: The AMTPA requires that state-chartered depository institutions disclose the terms and conditions of alternative mortgage transactions to consumers in a clear and conspicuous manner.
- Advance Notice: The law also required state-chartered depository institutions to provide a written notice to the borrower at least three days before the first payment at the adjusted rate is due, and annually thereafter as long as the loan has an adjustable rate.
- Prohibitions on discriminatory practices: The AMTPA prohibited discriminatory practices in the making of alternative mortgage transactions.
- Record retention: The AMTPA required state-chartered depository institutions to retain records of alternative mortgage transactions for a certain period of time and make them available for review by the relevant regulatory authorities.
- Enforcement: The AMTPA was enforced by the relevant state and federal regulatory agencies, which could impose penalties on violators, including fines and legal action.
It’s worth noting that the AMTPA was repealed in 2011 by the Dodd-Frank Wall Street Reform and Consumer Protection Act, however, some of the provisions of AMTPA were incorporated into the Truth in Lending Act (TILA) as a result of the Dodd-Frank Act, which continues to govern the disclosure of alternative mortgage transactions.
