Federal Reserve issues mortgage practice rules

By Gary Linnell

ProWEB Wire (Industry News)

The Federal Reserve today published rules aimed at protecting consumers from abusive mortgage practices.

The new rules -- which require lenders to provide consumers with clearer disclosures about their loan costs -- also implement a ban on payments to mortgage brokers for steering borrowers into loans with higher interest rates.

Under the terms of these rules, lenders must also provide a table that states the maximum interest rate and payment that can occur during the first five years of an adjustable-rate mortgage.