Fed to make loan docs more transparent

New York /
Jan.January 21, 2011 12:24 PM

Though recent changes have helped make loan documents more understandable for borrowers, some people with more complicated mortgages are still struggling to grasp the terms, and the Federal Reserve is now addressing that issue. As of Jan. 30, lenders will be required to provide more detailed, easier-to-read disclosures of the interest rates and monthly payments associated with all mortgages, most significantly adjustable-rate mortgages, or ARMs, the New York Times reported. The Fed guidelines also apply to other types of variable mortgages, including negative-amortization loans, interest-only loans and introductory loans, among others. “All of these loans are really complex for the consumer,” said Thomas Martin, the president of America’s Watchdog, a consumer advocacy group. He said that many variable loans covered under the guidelines were at the center of the subprime meltdown and appear to be making a comeback. Terry Francisco, a spokesperson for Bank of America, said the bank was “fully prepared to implement these new documents.” However, he also expressed concern that borrowers might be “further confused” by the guidelines, since “they’re going to be awash in spreadsheets.” [NYT]


Related Articles

arrow_forward_ios
Clockwise from left: One Vanderbilt, 111 Wall Street, 520 and 524 Broadway (SL Green and Google Maps)
These were the largest Manhattan real estate loans in June
These were the largest Manhattan real estate loans in June
Tomo Co-Founders Carey Armstrong and Greg Schwartz (LinkedIn via Schwartz and Armstrong, Getty)
Tomo digital mortgage startup enters Texas, Washington markets
Tomo digital mortgage startup enters Texas, Washington markets
Shares of Rocket Cos and LoanDepot rose while shares Fannie Mae and Freddie Mac plunged after Supreme Court ruling (Unsplash)
For mortgage sector stocks, Fannie and Freddie ruling was positive
For mortgage sector stocks, Fannie and Freddie ruling was positive
The pandemic disproportionately impacted unemployment rates for Black and Latino households, making them more likely to enter mortgage forbearance. (iStock)
Black and Latino homeowners left behind in mortgage refinancing wave
Black and Latino homeowners left behind in mortgage refinancing wave
JPMorgan Chase CEO Jamie Dimon (Getty)
JPMorgan invests in private-label mortgage platform
JPMorgan invests in private-label mortgage platform
Kairos’ founder Ankur Jain (Getty)
Startup charts a (long) path toward homeownership
Startup charts a (long) path toward homeownership
Millions of homeowners remain vulnerable as forbearance winds down
Millions of homeowners remain vulnerable as forbearance winds down
Millions of homeowners remain vulnerable as forbearance winds down
Federal Reserve Chair Jerome Powell (Getty)
Traders eye Fed pullback on mortgage bonds
Traders eye Fed pullback on mortgage bonds
arrow_forward_ios

The Deal's newsletters give you the latest scoops, fresh headlines, marketing data, and things to know within the industry.

Loading...