Federal Reserve Issues Rule Changes for Home Equity Lines of Credit Closed-End Mortgages
by admin ~ July 21st, 2009.Last week, the Federal Reserve announced they would issuing a new proposal this week under its Truth in Lending Authority that would provide for re-designed disclosures and rule changes for closed-end first and second mortgages and home equity lines of credit (HELOCs), Fed Governor Elizabeth Duke wrote in prepared comments for her testimony scheduled this afternoon before the House Financial Services Committee. The Fed’s proposal will also include new rules governing mortgage originator compensation, Duke said. She noted that the Fed is currently engaged in ‘discussions’ with the Department of Housing and Urban Development (HID) about using such protocol for combined Real Estate Settlement Procedures Act (RESPA) and the Truth in Lending Act (TILA) disclosures.
Elsewhere in her testimony, Duke recommended that Congress ‘formally codify’ consumer protection as a core mission of the Fed, similar to monetary policy and banking supervision. ‘This would provide a clear and ongoing understanding that consumer protection matters should be viewed as an integral part of the Federal Reserve’s overall mission,’ Duke said. She suggested that Congress could require the Fed Chairman to report periodically on the state of consumer protection in a manner similar to that of his semiannual report to Congress on monetary policy. Duke noted that the Fed plans to conduct periodic reviews of consumer regulations and policy and will arrange for public hearings held every two years to gather information relating to consumer issues and risks. ‘As we envision this process, the Federal Reserve’s Consumer Advisory Council would assist in preparing the agenda and its members would participate in the hearings, as appropriate,’ she said. Read the complete article online >
Category: Home Equity News, Mortgage News, Mortgage Rate News | Tags: closed-end mortgages, disclosures, HELOCs, home equity lines of credit, Real Estate Settlement Procedures Act, rule changes, second mortgages, Truth in Lending Act