Mortgage disclosure rule beefed up

November 13 2008 - Lenders and mortgage brokers will be required to provide home buyers clearer information about loan terms and closing costs under guidelines issued yesterday by the Department of Housing and Urban Development.

Banks will have to provide consumers a standardized “good-faith estimate” of closing costs beginning in 2010, HUD Secretary Steven Preston said. Banks now have different forms making it difficult to compare offers.

The rules, which HUD said are the first changes of their kind in 30 years, are aimed at addressing record foreclosure rates brought on in part by easy credit and a flood of adjustable-rate mortgages homeowners have been unable to pay. Delinquencies on subprime adjustable-rate mortgages jumped to 21 percent in June from 9.9 percent in December 2004, according to the Mortgage Bankers Association.

Mortgage disclosure rule beefed up
Bloomberg News