New Federal Reserve Rules for Home Mortgage Loans

Last July the Federal Reserve approved final rules regarding home mortgage loans that took effect October 1, 2009. The rules are designed to better protect consumers by facilitating responsible home mortgage lending by banks, mortgage companies and mortgage brokers... something that wasn't done during the go-go years of the housing bubble.

The final rule amends Regulation Z (Truth in Lending) and was adopted under the Home Ownership and Equity Protection Act (HOEPA). New rules include the following:

Loan Type
Purchase Refinance with Cash out Refinance
State
Alabama Alaska Arizona Arkansas California Colorado Connecticut Delaware District Of Columbia Florida Georgia Hawaii Idaho Illinois Indiana Iowa Kansas Kentucky Louisiana Maine Maryland Massachusetts Michigan Minnesota Mississippi Missouri Montana Nebraska Nevada New Hampshire New Jersey New Mexico New York North Carolina North Dakota Ohio Oklahoma Oregon Pennsylvania Rhode Island South Carolina South Dakota Tennessee Texas Utah Vermont Virginia Washington West Virginia Wisconsin Wyoming
FICO Score
Superior (780-850) Exceptional (760-779) Excellent (740-759) Very Good (720-739) Good (700-719) Above Average (680-699) Average (660-679) Fair (640-659) Need Improvement (620-639) Poor (350-620)
Loan Amount
$
Points
Up to 0 points Up to 0.5 points Up to 1 points Up to 1.5 points Up to 2 points Up to 2.5 points Up to 3 points
LTV
%
Loan Term
 15-Year Fixed  20-Year Fixed  30-Year Fixed  5-Year ARM  7-Year ARM  10-Year ARM
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The lenders whose rates and other terms appear on this chart are ICB's advertising partners. They provide their rate information to our data partner RateUpdate.com. Unless adjusted by the consumer, advertisers are sorted by APR from lowest to highest. For any advertising partners that do not provide their rate they are listed in advertisement display units at the bottom of the chart. Advertising partners may not pay to improve the frequency priority or prominence of their display. The interest rates, annual percentage rates and other terms advertised here are estimates provided by those advertising partners based on the information you entered above and do not bind. Any lender Monthly payment amounts stated do not include amounts for taxes and insurance premiums. The actual payment obligation will be greater if taxes and insurance are included. Although our data partner RateUpdate.com collects the information from the financial institutions themselves, the accuracy of the data cannot be guaranteed. Rates may change without notice and can change intraday. Some of the information contained in the rate tables including but not limited to special marketing notes is provided directly by the lenders. Please verify the rates and offers before applying for a loan with the financial institution themselves. No rate is binding until locked by a lender.
Lender
APR / Rate
Fees / Points
Payment

NMLS #2890
License: 413-0477
5.651%
15-Year Fixed
5.500%
$3,923
Includes 0.732 points for $2,928
Lender Fees: $995
$3,269 /mo
Next >

NMLS #757416
5.726%
15-Year Fixed
5.625%
$2,632
Includes 0.658 points for $2,632
Lender Fees: $0
$3,295 /mo
Next >

NMLS #1025894
5.778%
15-Year Fixed
5.625%
$3,984
Includes 0.821 points for $3,284
Lender Fees: $700
$3,295 /mo
Next >

NMLS #2890
License: 413-0477
6.713%
30-Year Fixed
6.625%
$3,659
Includes 0.666 points for $2,664
Lender Fees: $995
$2,562 /mo
Next >

NMLS #2561451
6.763%
30-Year Fixed
6.624%
$5,811
Includes 0.954 points for $3,816
Lender Fees: $1,995
$2,561 /mo
Next >

NMLS #757416
6.804%
30-Year Fixed
6.750%
$2,220
Includes 0.555 points for $2,220
Lender Fees: $0
$2,595 /mo
Next >

NMLS #1025894
6.834%
30-Year Fixed
6.750%
$3,440
Includes 0.685 points for $2,740
Lender Fees: $700
$2,595 /mo
Next >

NMLS #401822
6.896%
30-Year Fixed
6.750%
$5,995
Includes 1.000 points for $4,000
Lender Fees: $1,995
$2,595 /mo
Next >

NMLS #399799
6.969%
30-Year Fixed
6.875%
$3,976
Includes 0.662 points for $2,648
Lender Fees: $1,328
$2,628 /mo
Next >

NMLS #401822
7.804%
15-Year Fixed
7.500%
$7,500
Includes 0.875 points for $3,500
Lender Fees: $4,000
$3,709 /mo
Next >
Rate data provided by RateUpdate.com. Displayed by ICB, a division of Mortgage Research Center, NMLS #1907, Equal Housing Opportunity. Payments do not include taxes and insurance premiums. Actual payments will be greater with taxes and insurance included. Rate and product details.
1. On "higher priced mortgage loans," new rules prohibit a mortgage lender from making a mortgage loan without regard to the mortgagee's ability to repay the home loan. Imagine that - the government has to create a rule to insure mortgagors make home mortgage loans that borrowers can repay.
2. Mortgage creditors have to verify a borrower's income and assets to help determine if the borrower has the ability to repay the mortgage.
3. Prepayment penalties are banned if the mortgage payment can change in the initial four years of the loan.  For other higher-priced mortage loans, a prepayment penalty period cannot last for more than two years.
4. Starting sometime in 2010, mortgage creditors have to establish escrow accounts for property taxes and home owner's insurance for all first-lien mortgage loans.

Other rules that govern a home mortgage loan that is secured by a borrower's principal home of any loan amount include the following:

1. Mortgage lending institutions and mortgage brokers are prohibited from having a real estate appraiser misstate a home's value. This is another basic home mortgage principle that was blatantly ignored during the housing bubble.
2. Companies that service home mortgage loans are not allow to engage in certain practices, such as pyramiding late fees. Also, mortgage services are required to credit a mortgage payment as of the date they receive the payment. They also have to provide a mortgage payoff statement within a reasonable time.
3. Mortgage creditors must provide a good faith estimate of loan costs within three days after a consumer applies for any home mortgage secured by a consumer's principal dwelling. This includes a schedule of payments, a home improvement loan or a mortgage refinance. Early cost estimates were already required for mortgages on a home purchase.
4. Mortgagees cannot be charged any fees until after they receive the early disclosures, except a reasonable fee for obtaining the borrower's credit history.

New mortgage rate advertising standards include additional information about mortgage rates and monthly mortgage payments.  The final rule also bans seven deceptive or misleading advertising practices, including representing that a mortgage rate or mortgage payment is "fixed" when it can change.