Feds Changing Guidelines for Risky Loans
The Feds in Washington have taken a long, hard look at higher risk loans and will be announcing changes in the guidelines this Fall. The main objective is to clarify the loan terms in marketing materials so borrowers will understand that their interest rates will vary, thus causing their mortgage payments to increase.The new guidelines would "force lenders to tighten underwriting standards by avoiding low-documentation loans in most instances and ensuring that borrowers will be able to afford the payments when they rise in the future," according to the National Association of Realtors daily news feature. Read about it here.
All this after reports of mortgage fraud being on the rise. Mortgage fraud happens when loans are obtained by providing false information.
posted by Kathy T. @ 8:32 AM
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