The New York State Department of Financial Services has issued a temporary order that relaxes the definition of subprime home loans as it applies to Federal Housing Administration loans for a period of 60 days. At the same time, Rholda Ricketts, the deputy superintendent in charge of mortgage banking, has written a letter providing “guidance” to conforming lenders regarding that same definition.

The recent spike in interest rates, and in FHA’s case, the change to require the mortgage insurance premium to be paid throughout the life of the loan has disrupted, if not outright seized up, the mortgage lending business in the state.

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