The Alternative Mortgage Transaction Parity Act of 1982, also known as AMTPA, preempts state laws that restrict banks from making any mortgage except conventional fixed rate

Fixed rate mortgage

A fixed-rate mortgage is a mortgage loan first developed by the Federal Housing Administration where the interest rate on the note remains the same through the term of the loan, as opposed to loans where the interest rate may adjust or "float." Other forms of mortgage loan include interest only...

  amortizing mortgages

Amortizing loan

In banking and finance, an amortizing loan is a loan where the principal of the loan is paid down over the life of the loan, according to some amortization schedule, typically through equal payments....

. AMTPA was contained in title VIII of the Garn–St. Germain Depository Institutions Act passed in 1982.

Mortgages allowed by the act included:

• Adjustable-rate mortgages, in which the interest rate becomes floating after a number of years.
• Balloon payment mortgage
  Balloon payment mortgage
  A balloon payment mortgage is a mortgage which does not fully amortize over the term of the note, thus leaving a balance due at maturity. The final payment is called a balloon payment because of its large size. Balloon payment mortgages are more common in commercial real estate than in...
  
  s have a large payment remaining when the loan comes due.
• Interest-only mortgages
  Interest-only loan
  An interest-only loan is a loan in which, for a set term, the borrower pays only the interest on the principal balance, with the principal balance unchanged...
  
   only require the borrower to pay the interest on the principal balance for the first years of the loan.

The United States House of Representatives

United States House of Representatives

The United States House of Representatives is one of the two Houses of the United States Congress, the bicameral legislature which also includes the Senate.The composition and powers of the House are established in Article One of the Constitution...

 passed H.R.3915 "The Mortgage Reform and Anti-Predatory Lending Act of 2007" in November, 2007. It remains before the United States Senate

United States Senate

The United States Senate is the upper house of the bicameral legislature of the United States, and together with the United States House of Representatives comprises the United States Congress. The composition and powers of the Senate are established in Article One of the U.S. Constitution. Each...

. The House bill would require lenders to write mortgages that take into account the borrowers' ability to pay at the fully indexed rate.

See also

• Financing
• Refinancing
  Refinancing
  Refinancing may refer to the replacement of an existing debt obligation with a debt obligation under different terms. The terms and conditions of refinancing may vary widely by country, province, or state, based on several economic factors such as, inherent risk, projected risk, political...
  
  
• Bridge financing
  Bridge financing
  Bridge financing is a method of financing, used to maintain liquidity while waiting for an anticipated and reasonably expected inflow of cash. Bridge financing is commonly used when the cash flow from a sale of an asset is expected after the cash outlay for the purchase of an asset...
  
  
• Promissory note
  Promissory note
  A promissory note is a negotiable instrument, wherein one party makes an unconditional promise in writing to pay a determinate sum of money to the other , either at a fixed or determinable future time or on demand of the payee, under specific terms.Referred to as a note payable in accounting, or...
  
  
• Loan origination
  Loan origination
  Loan origination is the process by which a borrower applies for a new loan, and a lender processes that application. Origination generally includes all the steps from taking a loan application through disbursal of funds . Loan servicing generally covers everything after disbursing the funds until...
  
  
• Subprime lending
  Subprime lending
  In finance, subprime lending means making loans to people who may have difficulty maintaining the repayment schedule...
  
  
• Subprime mortgage crisis
  Subprime mortgage crisis
  The U.S. subprime mortgage crisis was one of the first indicators of the late-2000s financial crisis, characterized by a rise in subprime mortgage delinquencies and foreclosures, and the resulting decline of securities backed by said mortgages....
  
  
• Americans for Fairness in Lending
  Americans for Fairness in Lending
  Americans for Fairness in Lending is a non-profit organization designed to draw attention to what it calls abuses by the lending industry in America...