Alternative Mortgage Transaction [Banks & Banking] Law and Legal Definition

Pursuant to 12 USCS § 3802 (1) [Title 12. Banks and Banking; Chapter 39. Alternative Mortgage Transactions], the term alternative mortgage transaction means “a loan or credit sale secured by an interest in residential real property, a dwelling, all stock allocated to a dwelling unit in a residential cooperative housing corporation, or a residential manufactured home (as that term is defined in section 603(6) of the National Manufactured Home Construction and Safety Standards Act of 1974 [42 USCS § 5402(6)])--

(A) in which the interest rate or finance charge may be adjusted or renegotiated;

(B) involving a fixed-rate, but which implicitly permits rate adjustments by having the debt mature at the end of an interval shorter than the term of the amortization schedule; or

(C) involving any similar type of rate, method of determining return, term, repayment, or other variation not common to traditional fixed-rate, fixed-term transactions, including without limitation, transactions that involve the sharing of equity or appreciation.”