State Regulators Backing Federal B&C Guidance

State regulators are taking steps to ensure that mortgage brokers and state-licensed lenders adhere to the same standards as federally chartered and regulated financial institutions when it comes to subprime hybrid adjustable-rate mortgages like 2/28s.The Conference of State Bank Supervisors and the American Association of Residential Mortgage Regulators have endorsed a proposed statement on subprime mortgage lending issued by federal banking regulators on March 2. The comment period on the federal interagency statement ends May 7. Now the CSBS and the AARMR are "developing a parallel statement which will significantly mirror the final interagency statement," CSBS said in its weekly newsletter. The state regulators are accepting input until May 7. The CSBS and the AARMR conducted a similar process in adopting guidance on nontraditional mortgages that addressed interest-only and payment-option ARMs.