On the heels of the subprime mortgage mess, which is impacting credit markets worldwide, the U.S. Federal Reserve Board today proposed regulatory changes to protect consumers from unfair or deceptive home mortgage lending and advertising practices.
The rule, which is now out for comment, would restrict certain practices and would also require certain mortgage disclosures to be provided earlier in the transaction. The proposal includes four key protections for “higher-priced mortgage loans” secured by a consumer’s principal dwelling. The rule would define “higher-priced mortgage loan” to capture loans in the subprime market but generally exclude loans in the prime market.
Several protections would also apply to all loans secured by a consumer’s principal dwelling, regardless of the loan’s rate. It also includes proposed revisions to advertising rules.
“Our goal is to promote responsible mortgage lending, for the benefit of individual consumers and the economy,” said Federal Reserve chairman Ben Bernanke. “We want consumers to make decisions about home mortgage options confidently, with assurance that unscrupulous home mortgage practices will not be tolerated.”
Federal Reserve proposes new mortgage rules
Proposal would protect consumers from unfair or deceptive home mortgage lending
- By: James Langton
- December 18, 2007 December 18, 2007
- 16:45