[Federal Register Volume 60, Number 189 (Friday, September 29, 1995)]
[Rules and Regulations]
[Pages 50399-50400]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 95-24240]
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[[Page 50400]]
FEDERAL RESERVE SYSTEM
12 CFR Part 226
[Regulation Z; Docket No. R-0858]
Truth in Lending; Mortgage Disclosures; Correction
AGENCY: Board of Governors of the Federal Reserve System.
ACTION: Technical Correction to final regulation.
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SUMMARY: This document contains a correction to the final rule (Docket
No. R-0858) which was published Friday, March 24, 1995 (60 FR 15463).
The amendments to Regulation Z concerned new disclosure requirements on
reverse mortgage transactions (as well as on certain home loans bearing
rates or fees above a certain percentage or amount).
EFFECTIVE DATE: September 25, 1995.
FOR FURTHER INFORMATION CONTACT: Sheilah Goodman or Kurt Schumacher,
Staff Attorneys, Division of Consumer and Community Affairs, Board of
Governors of the Federal Reserve System, at (202) 452-3667 or 452-2412;
for the hearing impaired only, Dorothea Thompson, Telecommunications
Device for the Deaf, at (202) 452-3544.
SUPPLEMENTARY INFORMATION:
Background
The regulation that is the subject of this correction is Regulation
Z (12 CFR part 226), which implements the Truth in Lending Act (15
U.S.C. 1601-1666j). The act (TILA) requires creditors to disclose
credit terms for consumer transactions. The Home Ownership and Equity
Protection Act of 1994 (HOEPA), contained in the Riegle Community
Development and Regulatory Improvement Act of 1994 (Pub. L. 103-325,
108 Stat. 2160) amended the TILA. Section 154 of the HOEPA added a new
section 138 to the TILA dealing with disclosures required for reverse
mortgage transactions. The final rule implementing these provisions in
Regulation Z was published on March 24, 1995 (60 FR 15463).
Need for Correction
As published, the final rule implementing new TILA section 138
contains an error in the unit period used in the first example of the
total annual loan cost rate computation in appendix K to part 226,
which also results in an erroneous total annual loan cost rate being
shown for that example. The error resulted from the use of a monthly
unit period in the transaction, whereas, under the definition of a unit
period for single-advance single-payment transactions (paragraph
(b)(4)(ii) of appendix K), the proper unit period is 1 year. This error
has been corrected. For consistency and ease of understanding, the Baln
figure has also been revised to reflect the use of an annual unit
period.
Correction of Publication
Accordingly, the publication on March 24, 1995, of the final
regulation (Docket No. R-0858), which was the subject of FR Doc. 95-
7231, is corrected as follows:
Appendix K to Part 226--[Corrected]
On page 15475, in the example in paragraph (c)(1) of appendix K to
Part 226, the formula (which follows the phrase ``Assumed annual
dwelling appreciation rate: 4%'') is corrected to read as follows:
* * * * *
(c) * * *
(1) * * *
P10 = Min (103,385.84, 137,662.72)
[GRAPHIC][TIFF OMITTED]TR29SE95.004
i = .1317069438
Total annual loan cost rate (100(.1317069438 x 1)) = 13.17%
(2) * * *
Board of Governors of the Federal Reserve System, September 25,
1995.
William W. Wiles,
Secretary of the Board.
[FR Doc. 95-24240 Filed 9-28-95; 8:45 am]
BILLING CODE 6210-01-P
