108 STAT. 2196 PUBLIC LAW 103-325—SEPT. 23, 1994 "(ii) the total amount paid by the consumer in connection with the transaction. "(3) OFFSET. —The amount of damages that may be awarded under paragraph (2)(B) shall be reduced by the amount of any damages awarded under paragraph (2)(A). "(4) NOTICE. —Any person who sells or otherwise assigns a mortgage referred to in section 103(aa) shall include a prominent notice of the potential liability under this subsection as determined by the Board.". SEC. 154. REVERSE MORTGAGE DISCLOSURE. (a) DEFINITION OF REVERSE MORTGAGE. —Section 103 of the Truth in Lending Act (15 U.S.C. 1602) is amended by adding at the end the following new subsection: "(bb) The term 'reverse mortgage transaction' means a nonrecourse transaction in which a mortgage, deed of trust, or equivalent consensual security interest is created against the consumer's principal dwelling— "(1) securing one or more advances; and "(2) with respect to which the payment of any principal, interest, and shared appreciation or equity is due and payable (other than in the case of default) only ^er— "(A) the transfer of the dwelling; "(B) the consumer ceases to occupy the dwelling as a principal dwelling; or "(C) the death of the consumer.". (b) DISCLOSURE.—Chapter 2 of title I of the Truth in Lending Act (15 U.S.C. 1631 et seq.) is amended by adding at the end the following new section: 15 USC 1648. "SEC. 138. REVERSE MORTGAGES. "(a) IN GENERAL.—In addition to the disclosures required under this title, for each reverse mortgage, the creditor shall, not less than 3 days prior to consummation of the transaction, disclose to the consumer in conspicuous type a good faith estimate of the projected total cost of the mortgage to the consumer expressed as a table of annual interest rates. Each annual interest rate shall be based on a projected total future credit extension balance under a projected appreciation rate for the dwelling and a term for the mortgage. The disclosure shall include— "(1) statements of the annual interest rates for not less than 3 projected appreciation rates and not less than 3 credit transaction periods, as determined by the Board, including— "(A) a short-term reverse mortgage; "(B) a term equaling the actuarial life expectancy of the consumer; and "(C) such longer term as the Board deems appropriate; and "(2) a statement that the consumer is not obligated to complete the reverse mortgage transaction merely because the consumer has received the disclosure required under this section or has signed an application for the reverse mortgage. "(b) PROJECTED TOTAL COST. — In determining the projected total cost of the mortgage to be disclosed to the consumer under subsection (a), the creditor shall take into account— "(1) any shared appreciation or equity that the lender will, by contract, be entitled to receive;
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