Closing the Barn Door on Sub-Prime ARM Mortgages

To be filed under "Better-Late-Than-Never" regulatory actions: The Federal Reserve is considering the following changes in Sub-Prime lending disclosures:

The federal financial regulatory agencies today issued proposed illustrations of consumer information for certain adjustable-rate mortgage [ARM] products described in the agencies' Statement on Subprime Mortgage Lending (Subprime Statement), effective July 10, 2007. The Subprime Statement recommends communications that ensure consumers have clear, balanced, and timely information about the relative benefits and risks of certain ARM products. The illustrations are intended to assist institutions in providing this information.

(Below is a table of the proposed changes)

So is this a case of too-little-too-late, or might this actually accomplish something positive?

click to enlarge

The rest of the proposed changes are after the jump.

Sources:
Federal Financial Regulators Propose Illustrations of Consumer Information to Support Their Statement on Subprime Mortgage Lending
Federal Reserve, August 14, 2007
http://www.federalreserve.gov/boarddocs/press/bcreg/2007/20070814/default.htm

Proposed Illustrations of Consumer Information for Subprime Mortgage Lending
PDF, pages 8 and 9
Federal Reserve, August 3, 2007
http://www.federalreserve.gov/boarddocs/press/bcreg/2007/20070814/attachment.pdf

Comments

[plumber2:]

Note: Unemployment is only 4.6% , and the FED has not raised rates, so why are people defaulting on their moatgages? Could it be because the Dumb Democrats demand giving ( no money down) mortages to uneducated deadbeats who prefer three six packs every weekend and watching net flix to paying their mortgages? And the stupid Republicans in Congress went along with this.

Consider, Europe who demands 20% down and offers only 20 year mortgages does not have these credit problems.

Greed of the bankers who should have said no and the stupidity all politicians in Congress is to blame.
Therefore, call your congressman and complaign. Say no bail out with my tax money. You created the problem so use your personal money.

2007 Aug 16 08:59 AM