---
kind: "section"
citation: "12 U.S.C. § 4905"
title: "12"
title_heading: "Banks and Banking"
number: "4905"
heading: "Disclosure requirements for lender paid mortgage insurance"
release: "119-102"
date: "2026-07-12"
url: "https://uscodex.org/usc/12/4905"
units:
  - "Chapter 49 — Homeowners Protection"
---

# §4905. Disclosure requirements for lender paid mortgage insurance

- (a) **Definitions—** For purposes of this section—
  - (1) the term “borrower paid [mortgage insurance](/usc/12/4901.md?p=8)” means [private mortgage insurance](/usc/12/4901.md?p=13) that is required in connection with a [residential mortgage transaction](/usc/12/4901.md?p=15), payments for which are made by the borrower;
  - (2) the term “lender paid [mortgage insurance](/usc/12/4901.md?p=8)” means [private mortgage insurance](/usc/12/4901.md?p=13) that is required in connection with a [residential mortgage transaction](/usc/12/4901.md?p=15), payments for which are made by a [person](/usc/12/5481.md?p=19) other than the borrower; and
  - (3) the term “loan commitment” means a prospective [mortgagee](/usc/12/4901.md?p=10)’s written confirmation of its approval, including any applicable closing conditions, of the application of a prospective [mortgagor](/usc/12/4901.md?p=11) for a [residential mortgage](/usc/12/4901.md?p=14) loan.
- (b) **Exclusion—** Sections [4902](/usc/12/4902.md) through [4904](/usc/12/4904.md) of this title do not apply in the case of lender paid [mortgage insurance](/usc/12/4901.md?p=8).
- (c) **Notices to mortgagor—** In the case of lender paid [mortgage insurance](/usc/12/4901.md?p=8) that is required in connection with a [residential mortgage transaction](/usc/12/4901.md?p=15)—
  - (1) not later than the date on which a loan commitment is made for the [residential mortgage transaction](/usc/12/4901.md?p=15), the prospective [mortgagee](/usc/12/4901.md?p=10) shall provide to the prospective [mortgagor](/usc/12/4901.md?p=11) a written notice—
    - (A) that lender paid [mortgage insurance](/usc/12/4901.md?p=8) differs from borrower paid [mortgage insurance](/usc/12/4901.md?p=8), in that lender paid [mortgage insurance](/usc/12/4901.md?p=8) may not be canceled by the [mortgagor](/usc/12/4901.md?p=11), while borrower paid [mortgage insurance](/usc/12/4901.md?p=8) could be cancelable by the [mortgagor](/usc/12/4901.md?p=11) in accordance with [section 4902(a) of this title](/usc/12/4902.md?p=a), and could automatically terminate on the [termination date](/usc/12/4901.md?p=18) in accordance with [section 4902(b) of this title](/usc/12/4902.md?p=b);
    - (B) that lender paid [mortgage insurance](/usc/12/4901.md?p=8)—
      - (i) usually results in a [residential mortgage](/usc/12/4901.md?p=14) having a higher interest rate than it would in the case of borrower paid [mortgage insurance](/usc/12/4901.md?p=8); and
      - (ii) terminates only when the [residential mortgage](/usc/12/4901.md?p=14) is refinanced (under the meaning given such term in the regulations issued by the [Board](/usc/12/1861.md?p=b-3) of Governors of the Federal Reserve System to carry out the Truth in Lending Act ([15 U.S.C. 1601](/usc/15/1601.md) et seq.)), paid off, or otherwise terminated; and
    - (C) that lender paid [mortgage insurance](/usc/12/4901.md?p=8) and borrower paid [mortgage insurance](/usc/12/4901.md?p=8) both have benefits and disadvantages, including a generic analysis of the differing costs and benefits of a [residential mortgage](/usc/12/4901.md?p=14) in the case lender paid [mortgage insurance](/usc/12/4901.md?p=8) versus borrower paid [mortgage insurance](/usc/12/4901.md?p=8) over a 10-year period, assuming prevailing interest and property appreciation rates;
    - (D) that lender paid [mortgage insurance](/usc/12/4901.md?p=8) may be tax-deductible for purposes of Federal income taxes, if the [mortgagor](/usc/12/4901.md?p=11) itemizes expenses for that purpose; and
  - (2) not later than 30 days after the [termination date](/usc/12/4901.md?p=18) that would apply in the case of borrower paid [mortgage insurance](/usc/12/4901.md?p=8), the [servicer](/usc/12/4901.md?p=16) shall provide to the [mortgagor](/usc/12/4901.md?p=11) a written notice indicating that the [mortgagor](/usc/12/4901.md?p=11) may wish to review financing options that could eliminate the requirement for [private mortgage insurance](/usc/12/4901.md?p=13) in connection with the [residential mortgage transaction](/usc/12/4901.md?p=15).
- (d) **Standard forms—** The [servicer](/usc/12/4901.md?p=16) of a [residential mortgage transaction](/usc/12/4901.md?p=15) may develop and use a standardized form or forms for the provision of notices to the [mortgagor](/usc/12/4901.md?p=11), as required under [subsection (c)](#c).

## Source credit

(Pub. L. 105–216, § 6, July 29, 1998, 112 Stat. 904; Pub. L. 106–569, title IV, §§ 403(c), 406(a), Dec. 27, 2000, 114 Stat. 2957, 2959.)

## Notes

### Editorial Notes

### References in Text

The Truth in Lending Act, referred to in subsec.(c)(1)(B)(ii), is title I of Pub. L. 90–321, May 29, 1968, 82 Stat. 146, which is classified generally to subchapter I (§ 1601 et seq.) of chapter 41 of Title 15, Commerce and Trade. For complete classification of this Act to the Code, see Short Title note set out under section 1601 of Title 15 and Tables.

### Amendments

2000—Subsec. (c). Pub. L. 106–569, § 403(c)(1)(A), struck out “a residential mortgage or” before “a residential mortgage transaction” in introductory provisions.

Subsec. (c)(1)(B)(ii). Pub. L. 106–569, § 406(a), inserted “(under the meaning given such term in the regulations issued by the Board of Governors of the Federal Reserve System to carry out the Truth in Lending Act (15 U.S.C. 1601 et seq.))” after “refinanced”.

Subsec. (c)(2). Pub. L. 106–569, § 403(c)(1)(B), inserted “transaction” before period at end.

Subsec. (d). Pub. L. 106–569, § 403(c)(2), inserted “transaction” after “residential mortgage”.

### Statutory Notes and Related Subsidiaries

### Effective Date

Section effective 1 year after July 29, 1998, see section 13 of Pub. L. 105–216, set out as a note under section 4901 of this title.