What is the Alternative Mortgage Transaction Parity Act?

The Alternative Mortgage Transaction Parity Act (AMTPA) is a federal law that applies to Delaware and all other states. The AMTPA was created in 1982 to help promote more affordable mortgage loans by allowing lenders to offer alternative mortgage products. This Act is also known as the “Home Equity Loan Consumer Protection Act of 1982.” The AMTPA regulates all types of alternative mortgage products offered by lenders, including adjustable rate mortgages (ARMs), balloon mortgages, shared appreciation mortgages, and buy-downs. It requires lenders to provide consumers with fair and transparent disclosures about the terms of the loan and provide borrowers with a right to cancel the loan within three business days. The Act further requires lenders to follow several consumer protection provisions, such as a limit on late fees and a prohibition against unfair lending practices, including discrimination based on race, color, religion, national origin, or gender. Finally, the Act limits a lender’s ability to increase the interest rate or fees after the loan has been approved by prohibiting the process known as “loan flipping.” The AMTPA is an important law as it helps protect consumers from predatory lenders and increases competition in the mortgage market by allowing lenders to offer more affordable and innovative loan products. It also provides borrowers with more information on their loan options, allowing them to make informed decisions when selecting a mortgage.

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What is the Alternative Mortgage Transaction Parity Act?

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