Federal banking regulators are expected to issue their long-awaited non-traditional mortgage guidance in the next few days, possibly as soon as Friday, according to industry officials.The long-awaited guidance addresses underwriting and disclosure standards on interest-only mortgages, payment-option adjustable-rate mortgages, and "piggyback" loans. Regulators are concerned that some consumers do not fully understand how these products reset and could face steep monthly payment increases. Meanwhile, Friedman Billings Ramsey analyst Paul Miller issued a report saying the impact of the final guidance will be "relatively benign," especially in regard to option ARM lenders. "We believe, though, that the new restrictive guidance could shrink the option ARM market by prohibiting the more marginal underwriting practices," he writes in a Sept. 27 research paper.

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