Interest-only and payment-option ARM lenders will have to qualify borrowers at the fully indexed rate with potential negative amortization added to the loan amount under final federal regulatory guidance issued Friday.Banking regulators rejected industry complaints that the new underwriting guidelines will be too restrictive. Under the mandate, payment-option adjustable-rate mortgage servicers must include in the monthly mortgage statement an "explanation" that if borrowers chooses the minimum monthly payment -- which many do -- it would increase their loan balance. "The regulators stuck to their guns," said Howard Glaser, a former Department of Housing and Urban Development attorney who runs a consulting practice. ".... It is rare for federal regulators to step in and regulate a specific product. They are doing so here out of concern that they need to protect both the borrower and the bank." According to the Alternative Products Quarterly Data Report, the largest option ARM lenders include Countrywide Home Loans, Washington Mutual, and Golden West, among others. The regulators also issued model consumer disclosures for IO and option ARM products for public comment.
-
The increasing frequency and severity of droughts was top of mind for panelists at AmeriCatalyst's "Going to Extremes" conference Thursday.
10h ago -
In a Senate hearing, Director Sandra Thompson said a raise to the required income threshold provided to affordable housing was on the table, while housing regulators also faced questions related to property insurance hikes and title insurance waivers.
10h ago -
The nonpayment rate for non-qualified mortgages is up 21 basis points from February and 134 basis points from March 2023, Morningstar DBRS said.
April 18 -
The government mortgage-bond guarantor will require additional information on foreclosure prevention actions, and retire some forbearance reporting.
April 18 -
But views are split, at least in the near-term on whether rising mortgage rates are holding back the Spring home purchase season.
April 18 -
The top five producers had an average dollar volume of FHA loans of more than $50 million in 2023.
April 18