Six members of the Senate Banking Committee are urging state and federal banking regulators to clarify the recently issued nontraditional mortgage guidance so it applies to subprime "2/28" adjustable-rate mortgages."It is our view that these mortgages have a number of the same risky attributes as the interest-only and payment-option ARMs and, therefore, should be covered by the new guidance," the senators say in a letter to regulators. "We would respectfully request that you issue a timely clarification to that effect." (The 2/28 ARM is a 30-year mortgage that has a fixed rate for the first two years.) The letter explains that subprime borrowers can see their interest rate jump from 8% to 12% when the initial fixed-rate period expires after two years, which is similar to the payment shock faced by IO and option ARM borrowers. Regulators issued the guidance to ensure that the nontraditional mortgage are underwritten at the fully indexed rate so borrowers are not forced to refinance or sell their home when the loan resets. The nontraditional mortgage guidance also addresses risk layering and other practices that "should apply" to subprime 2/28 mortgages, the senators say. Sens. Paul S. Sarbanes (D-Md.), Wayne Allard (R-Colo.), Christopher J. Dodd (D-Conn.), Jim Bunning (R-Ky.), Jack Reed (D-R.I.), and Charles E. Schumer (D-N.Y.) signed the letter.
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Doxo plans to fight the FTC complaint, which focuses broadly on consumer finance, but there are signs of confusion about the company's role in mortgages too.
April 25 -
Members of the LGBTQ community were most likely to have experienced housing bias, according to a Zillow survey, which also found many people don't recognize how fair lending laws could help.
April 25 -
Senior executives making over $151,000 would still be subject to such clauses should the rule go into effect this year.
April 25 -
Christopher J. Gallo and his aide, Mehmet A. Elmas, allegedly withheld information in mortgage applications, hiding that borrowers were purchasing second home properties.
April 25 -
Mortgage rates rose 7 basis points this week, Freddie Mac said, and more increases are likely following a weaker than expected gross domestic product report.
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Independent mortgage bankers lost the most money ever on every loan originated last year due to higher rates and lower volumes, an industry trade group said.
April 25