SEC-329 -- DISCLOSURE REGARDING INTEREST DUE UPON MORTGAGE PREPAYMENT.


 Section 203 of the National Housing Act (12 U.S.C. 1709), as amended
by the preceding provisions of this Act, is further amended by adding
at the end the following new subsection:

 "(s)(1) Each mortgagee (or servicer) with respect to a mortgage under
this section shall provide each mortgagor of such mortgagee (or
servicer) written notice, not less than annually, containing a statement
of the amount outstanding for prepayment of the principal amount of the
mortgage and describing any requirements the mortgagor must fulfill to
prevent the accrual of any interest on such principal amount after the
date of any prepayment. This paragraph shall apply to any insured
mortgage outstanding on or after the expiration of the 90-day period
beginning on the date of effectiveness of final regulations implementing
this paragraph.

 "(2) Each mortgagee (or servicer) with respect to a mortgage under
this section shall, at or before closing with respect to any such
mortgage, provide the mortgagor with written notice (in such form as the
Secretary shall prescribe, by regulation, before the expiration of the
90-day period beginning upon the date of the enactment of the
Cranston-Gonzalez National Affordable Housing Act) describing any
requirements the mortgagor must fulfill upon prepayment of the principal
amount of the mortgage to prevent the accrual of any interest on the
principal amount after the date of such prepayment. This paragraph shall
apply to any mortgage executed after the expiration of the period under
paragraph (1).".