Fed Urges More Rules for Mortgage Applicants
The Federal Reserve on Thursday recommended new disclosure rules for home owners that would make the process of getting a home mortgage more understandable.
Mortgage applicants would receive a single-page explanation of key issues concerning their loan and see a graph comparing the interest rate they were being offered to that given a low-risk borrower, the Fed said.
The Fed also recommended new compensation guidelines for mortgage brokers. Under the new rules, brokers would not receive more money for putting a borrower into a high-cost loan.
“Consumers need the proper tools to determine whether a particular mortgage loans is appropriate for their circumstances,” Fed Chairman Ben Bernanke told an open meeting of the Fed.
Source: The Associated Press, Jeannine Aversa
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