Federal financial regulatory agencies today issued a final statement on subprime mortgage lending to warn about certain adjustable-rate mortgage products that can cause “payment shock.”
The statement describes the safety, soundness and consumer protection standards that institutions should follow to ensure borrowers obtain loans they can afford to repay.
Consumer protection standards include clear and balanced product disclosures to customers and limits on prepayment penalties.
The statement is the work of the U.S. Office of the Comptroller of the Currency, the Board of Governors of the Federal Reserve System, the Federal Deposit Insurance Corp., the Office of Thrift Supervision and the National Credit Union Administration.
