25 Jul 2007 07:24 am
Many States Follow The Feds On Changing Subprime Rules
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State financial overseers are bringing new subprime regulations to state lenders not regulated by the feds. For the subprime lending industry, the mandates call for clear and effective management practices, underwriting standards, and consumer protection provisions that institutions must follow when marketing and selling to subprime borrowers, including Curtailing predatory lending. Loans should be based on the borrower’s ability to pay rather than the foreclosure or liquidation value of the home, tightening underwriting controls. Loan approval should be based on the borrowers ability to pay the loan based on the fully indexed rate, not the starter rate, predatory lending, poor underwriting habits and other industry behavior has left consumers suspicious about the lending process. |
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