New Federal Rules to Protect Borrowers of Mortgages in Real Estate Transactions
Under these new Federal guidelines, consumers would receive more notice in the form of disclosures to costs after applying for a mortgage; also, if the mortgage contains any risky items such as a negative amortization, then a one page document would accompany the application clearly explaining this to the consumer. This would include warnings about balloon payments associated with Adjustable-Rate Mortgages known as ARMs.
The public at large will be given an opportunity for approximately 120 days to comment on these new mortgage disclosure proposals before the new rules are finalized and implemented. The National Association of Mortgage Brokers are currently reviewing these proposals.