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The Department of Housing and Urban Development has issued guidance regarding the statutory moratorium on risk-based premiums enacted as part of the Housing and Economic Recovery Act of 2008. 

Mortgage Law Blog readers may recall that HUD had established a structure for certain risk-based premiums on loans insured by the Federal Housing Administration effective July 14, 2008.  In HERA, however, Congress imposed a one-year moratorium on risk-based pricing beginning October 1, 2008.

Congress also required HUD to issue guidance under HERA.  HUD has now issued that guidance. 

For a full copy of the guidance, please click here.

Tags: Consumer Protection, FHA Insurance, HUD & FHA, Mortgage Banking - General, Risk-Based Pricing by the Editor
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On May 19, 2008, the Board of Governors of the Federal Reserve and the Federal Trade Commission jointly issued proposed rules designed to implement the risk-based pricing provisions in section 311 of the Fair and Accurate Credit Transactions Act of 2003.  See 73 Fed. Reg. 28,966.

The proposal included model forms that creditors could use to comply with the requirements of the proposed rules. 

Mortgage Law Blog previously posted notice of the proposal.

The agencies have issued a technical correction to the proposal, stating:

Due to a technical error, the second page of Model form H-4 of the Board’s proposal and Model form B-4 of the Commission’s proposal, as published, erroneously included a row entitled “Key factors that adversely affected your credit score.” As discussed in the preamble to the proposed rules, the notice provided in connection with the credit score disclosure exception for non-mortgage credit is not required to include the key factors that affected the credit score (73 FR 28983).  This document corrects this error by amending Model forms H-4 and B-4 to delete this row.

For a full copy of the Federal Register notice containing the correction, please click here.

Comments remain due August 18, 2008.

Tags: Consumer Protection, Consumer Reports/Credit Reports, FACT Act, FCRA, Federal Reserve, Federal Trade Commission, Mortgage Banking - General, Regulations, Risk-Based Pricing, Unfair or Deceptive Acts by the Editor
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The Federal Trade Commission and the Board of Governors of the Federal Reserve have proposed new risk-based pricing rules under the Fair and Accurate Credit Transactions Act of 2003.  

According to the agencies’ joint summary, the new rules:

generally require a creditor to provide a risk-based pricing notice to a consumer when the creditor uses a consumer report to grant or extend credit to the consumer on material terms that are materially less favorable than the most favorable terms available to a substantial proportion of consumers from or through that creditor. The proposed rules also provide for two alternative means by which creditors can determine when they are offering credit on material terms that are materially less favorable. The proposed rules also include certain exceptions to the general rule, including exceptions for creditors that provide a consumer with a disclosure of the consumer’s credit score in conjunction with additional information that provides context for the credit score disclosure.

Comments are due August 18, 2008.

For a copy of the Federal Register notice, please click here.

Tags: Consumer Protection, Consumer Reports/Credit Reports, Federal Reserve, Federal Trade Commission, Financial Literacy, Mortgage Banking - General, Regulations, Risk-Based Pricing, Unfair or Deceptive Acts by the Editor
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As anticipated, see yesterday’s posting, the Department of Housing and Urban Development today issued a final rule implementing risk-based premiums for mortgage loans insured by the Federal Housing Administration.

The rule follows HUD’s request for public comments back on September 20, 2007.  A number of comments were submitted.  HUD discusses several of the commenters’ points in the preamble to today’s final rule.

There is no substitute for reading a final rule from HUD.  Mortgage Law Blog invites readers to take a look at the relatively short 7-pager here. 

Tags: HUD & FHA, Mortgage Banking - General, Regulations, Risk-Based Pricing by the Editor
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