|
WASHINGTON (AP) - Banking regulators on Friday completed guidelines that call on lenders to strictly evaluate borrowers' ability to repay home loans.
The guidance issued by the Federal Reserve and the other four federal agencies that regulate banks, thrifts and credit unions, comes in response to an increasingly troubled housing market and pressure from Congress. Home prices have been falling and mortgage defaults have been rising, especially among so-called subprime mortgages given to buyers with shaky credit.
The standards, which are voluntary and only apply to federally regulated lenders, calls for verification of borrowers' incomes in most cases. Consumers should have clear disclosures of their mortgage terms and should have at least 60 days to refinance a loan that is about to jump up to a higher rate without penalty.
|