What is the Alternative Mortgage Transaction Parity Act?

The Alternative Mortgage Transaction Parity Act (AMTPA) is a California state law that provides an exemption from usury laws for certain types of home loans. It allows lenders to offer alternative mortgage transactions (such as adjustable rate mortgages and interest-only loans) that may provide more affordable options for borrowers. The AMTPA was adopted in California in 1981 and has since expanded to most states. It was created to support the growth of the mortgage industry and to make it easier for homebuyers to finance their purchases. It also lets lenders offer different types of mortgages that carry different rates, terms and conditions. In addition to offering alternative mortgage transactions, the AMTPA also eliminates certain government restrictions on mortgage lenders. For example, it allows lenders to charge certain fees that would otherwise be prohibited under federal laws. It also permits lenders to provide adjustable-rate mortgages (ARMs) with higher initial interest rates and to charge certain origination fees. The AMTPA is a critical tool in the mortgage lending industry because it offers borrowers more options and allows lenders to charge fees to cover the cost of doing business. By offering more competitive terms, the AMTPA helps ensure that homeowners can access mortgages that are appropriate for their financial needs.

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What is the Alternative Mortgage Transaction Parity Act?

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