A new document entitled “ME Alternative Mortgage Transaction Disclosure” has been created and will print by default in all Maine initial disclosure packages if the loan has an adjustable interest rate, an interest only payment feature, or a balloon payment. This document will fulfill the requirements of Code Me. R. 02-029 ch, 119, §§4 & 5 and Code Me. R. 02-030 ch. 250, §§4 & 5 which stipulate that certain limitations must be provided to the applicant of an “alternative mortgage transaction”, defined as follows:
A. “Alternative Mortgage Transaction” means a loan or a credit sale secured by a one- to four-family dwelling located in this state, other than an open-end credit plan, made primarily for personal, family or household purposes with a term greater than one year:
(1) which is subject to Article IX of the Maine Consumer Credit Code or made to finance or refinance the purchase or initial construction of a one- to four-family dwelling, including a condominium unit, cooperative housing unit, or a manufactured home, and which is secured by a first lien interest in that property; and
(2) in which the interest rate may be adjusted or renegotiated, involving fixed rates but which implicitly permits rate adjustments by having the loan mature at the end of an interval shorter than the term of the amortization schedule or involving any similar type of rate, method of determining return, term, repayment, or other variation not common to fixed-rate, fixed term transactions, including, but not limited to, shared appreciation mortgages, adjustable-rate mortgages, partially amortized mortgages and renegotiable rate mortgages. (Code Me. R. 02-030 ch. 250, §3[A])
There are three document codes for the form with different print conditions, but they all contain the same language: cx15798 will trigger for Maine ARM and Negative Amortization Loans, cx15799 for Maine Fixed Rate Interest Only loans, and cx15780 for Maine Fixed Rate Balloon loans. These documents will begin printing on July 21, 2011.
If you have any questions or concerns, please contact Client Support at 1-800-497-3584, option 3.
July 19, 2011