CHANGES IN AMORTIZATION SCHEDULE.

SEC. 402. CHANGES IN AMORTIZATION SCHEDULE. (a) Treatment of Adjustable Rate Mortgages.—The Homeowners Protection Act of 1998 (12 U.S.C. 4901 et seq.) is amended— (1) in section 2— (A) in paragraph (2)(B)(i), by striking “amortization schedules” and inserting “the amortization schedule then in effect”; (B) in paragraph (16)(B), by striking “amortization schedules” and inserting “the amortization schedule then in effect”; (C) by redesignating paragraphs (6) through (16) (as amended by the preceding provisions of this paragraph) as paragraphs (8) through (18), respectively; and (D) by inserting after paragraph (5) the following new paragraph: “(6) Amortization schedule then in effect.—The term ‘amortization schedule then in effect’ means, with respect to an adjustable rate mortgage, a schedule established at the time at which the residential mortgage transaction is consummated or, if such schedule has been changed or recalculated, is the most recent schedule under the terms of the note or mortgage, which shows— “(A) the amount of principal and interest that is due at regular intervals to retire the principal balance and accrued interest over the remaining amortization period of the loan; and “(B) the unpaid balance of the loan after each such scheduled payment is made.”; and (2) in section 3(f)(1)(B)(ii), by striking “amortization schedules” and inserting “the amortization schedule then in effect”. (b) Treatment of Balloon Mortgages.—Paragraph (1) of section 2 of the Homeowners Protection Act of 1998 (12 U.S.C. 4901(1)) is amended by adding at the end the following new sentence: “A residential mortgage that: (A) does not fully amortize over the term of the obligation; and (B) contains a conditional right to refinance or modify the unamortized principal at the maturity date of the term, shall be considered to be an adjustable rate mortgage for purposes of this Act.”. (c) Treatment of Loan Modifications.— (1) In general.—Section 3 of the Homeowners Protection Act of 1998 (12 U.S.C. 4902) is amended— (A) by redesignating subsections (d) through (f) as subsections (e) through (g), respectively; and 114 STAT. 2957 (B) by inserting after subsection (c) the following new subsection: “(d) Treatment of Loan Modifications.—If a mortgagor and mortgagee (or holder of the mortgage) agree to a modification of the terms or conditions of a loan pursuant to a residential mortgage transaction, the cancellation date, termination date, or final termination shall be recalculated to reflect the modified terms and conditions of such loan.”. (2) Conforming amendments.—Section 4(a) of the Homeowners Protection Act of 1998 (12 U.S.C. 4903(a)) is amended— (A) in paragraph (1)— (i) in the matter preceding subparagraph (A), by striking “section 3(f)(1)” and inserting “section 3(g)(1)”; (ii) in subparagraph (A)(ii)(IV), by striking “section 3(f)” and inserting “section 3(g)”; and (iii) in subparagraph (B)(iii), by striking “section 3(f)” and inserting “section 3(g)”; and (B) in paragraph (2), by striking “section 3(f)(1)” and inserting “section 3(g)(1)”.