§3804 — Title 12 Banks and Banking | U.S. Code

Summary

If a State enacts a law or voters approve a measure that clearly says the State does not want the federal preemption in section 3803 to apply to alternative mortgage transactions, and that change goes into effect on or after October 15, 1982 but before three years after October 15, 1982, then federal preemption in section 3803 does not apply to alternative mortgage transactions in that State made on or after that effective date. Federal preemption still applies to any alternative mortgage deal that was agreed to on or after October 15, 1982 and before that later effective date (the "preemption period"), and to any renewal, extension, refinance, or other change to a mortgage entered into during that preemption period. A mortgage is treated as entered into during the preemption period if it is funded or extended during that period (even if promised earlier), or if a preexisting loan is changed during the period with the borrower’s written consent.

Title 12, §3804

Banks and Banking — Source: USLM XML via OLRC

(a)The provisions of section 3803 of this title shall not apply to any alternative mortgage transaction in any State made on or after the effective date (if such effective date occurs on or after October 15, 1982, and prior to a date three years after October 15, 1982) of a State law or a certification that the voters of such State have voted in favor of any provision, constitutional or otherwise, which states explicitly and by its terms that such State does not want the preemption provided in section 3803 of this title to apply with respect to alternative mortgage transactions (or to any class or type of alternative mortgage transaction) subject to the laws of such State, except that section 3803 of this title shall continue to apply to—

(1)any alternative mortgage transaction undertaken on or after such date pursuant to an agreement to undertake such alternative mortgage transaction which was entered into on or after October 15, 1982, and prior to such later date (the “preemption period”); and

(2)any renewal, extension, refinancing, or other modification of an alternative mortgage transaction that was entered into during the preemption period.

(b)An alternative mortgage transaction shall be deemed to have been undertaken during the preemption period to which this section applies if it—

(1)is funded or extended in whole or in part during the preemption period, regardless of whether pursuant to a commitment or other agreement therefor made prior to that period; or

(2)is a renewal, extension, refinancing, or other modification of an alternative mortgage transaction entered into before the preemption period and such renewal, extension, or other modification is made during such period with the written consent of any person obligated to repay such credit.

Notes & Related Subsidiaries

Editorial Notes

Amendments

1983—Subsec. (a). Pub. L. 98–181 inserted “(or to any class or type of alternative mortgage transaction)”.

Statutory Notes and Related Subsidiaries

Effective Date

Section effective Oct. 15, 1982, see section 807(a) of Pub. L. 97–320, set out as a note under section 3801 of this title.

§3804 Applicability of Preemption Provisions