ALTERNATIVE MORTGAGE TRANSACTION PARITY ACT AMTPA

An act from 1982 that over-rode many state laws that prevented banks from using mortgages other than conventional fixed-rate mortgages. This act allowed for the total costs of loans to become obscured, and led to the availability of various new mortgages such as adjustable rate mortgages (ARMs), interest only mortgages, and ballon payment mortgages.

Many believe that this act is the basis of the sub-prime crisis of 2007, which led to the financial crisis of 2007-2009. Many mortgage borrowers in the early 21st century obtained mortgages that they failed to understand. As borrowers began to lose their homes due to defaulting on their mortgages, house prices began to spiral downward making it even more difficult for people to refinance their homes into more affordable mortgages.