FHLBs Face New Predatory Rules
The Federal Housing Finance Board wants the Federal Home Loan Banks to review their anti-predatory lending policies and ensure they are comprehensive and effective.
"Each FHLBank must have in place comprehensive anti-predatory lending policies to govern the FHLBank's purchasing of mortgages and calculating the level of advances that can be made to members," according to an advisory bulletin issued last week.
These policies must address the high-cost loans and lending abuses associated with single-premium credit and life insurance, prepayment penalties and mandatory arbitration.
Member banks and thrifts must comply with these policies when selling loans to the FHLBanks or offering mortgages as collateral for advances.
(c) 2005 Mortgage Servicing News and SourceMedia, Inc. All Rights Reserved. http://www.mortgageservicingnews.com http://www.sourcemedia.com