Applying for a mortgage loan can be stressful. To get your best deal, you must be well-informed so you can compare offers, understand closing and settlement costs, be aware of insurance requirements, and avoid scams. A number of laws cover home mortgage disclosures—the amount and type of information lenders must provide so that you fully understand the terms and conditions of your loan. Other laws cover discrimination in mortgage lending.
OCC Bulletin 2017-28, "Mortgage Lending: Risk Management Guidance for Higher-Loan-to-Value Lending Programs in Communities Targeted for Revitalization"
A home is often a family's most valuable possession. Preventing avoidable foreclosures helps keep families in their homes, preserves communities, and prevents avoidable loss. The "Making Home Affordable" plan provides responsible homeowners with support to obtain affordable refinancing or loan modifications to help them stay in their homes. Read Foreclosure Prevention or visit the "Making Home Affordable" website for more information.
Home Mortgage Disclosure
The Home Mortgage Disclosure Act (HMDA) requires lenders to publicly report loan information. This information allows regulatory agencies to determine whether lenders are serving the housing needs of their communities and to identify discriminatory practices. Read about HMDA on the website of the Federal Financial Institutions Examination Council (FFIEC).
Protecting Your Home Equity
Borrowing from an unscrupulous lender, especially one that offers a high-cost loan using the home as security, could result in the loss of the borrower's home and money. This brochure—"Putting Your Home on the Loan Line Is Risky Business"—warns that regardless of whether a home equity loan is for a home repair, bill consolidation, or some other purpose, it is important to shop around. Use the Comparison Shopping for a Home Equity Loan worksheet to help you shop for the best deal.
Real Estate Settlement Procedures
The Real Estate Settlement Procedures Act (RESPA) requires lenders to provide good faith estimates of closing and settlement costs. These estimates help you comparison shop for a mortgage loan. RESPA also limits the amount of funds held in escrow for real estate taxes and insurance. Learn more. Read about RESPA on the Housing and Urban Development (HUD) website.
The Homeowners Protection Act (HPA) is often called the PMI Cancellation Act. Lenders require PMI (private mortgage insurance) for loans originated and closed without a sufficient down payment. If the borrower fails to make loan payments, PMI protects the lender. However borrowers may eventually meet certain requirements that can allow them to cancel PMI and stop paying the premiums. Read OCC's Answers About Private Mortgage Insurance.
Interest-Only Payments and Payment-Option ARMS: Are They For You?
Owning a home is part of the American dream, but exotic mortgages carry risks that consumers should understand. This brochure helps explain Interest-Only and Payment-Option Adjustable Rate Mortgages. (PDF 2.9MB).
A reverse mortgage is a special home loan that allows certain homeowners to borrow against the equity in their homes without making loan payments for as long as they live in the home. This type of loan carries risks and responsibilities of which you should be aware.
Related News and Issuances
|08/27/2019||OCC 2019-42||Flood Disaster Protection Act: Revised Interagency Examination Procedures|
|07/23/2019||OCC 2019-36||Mortgage Lending: Lending Standards for Asset Dissipation Underwriting|
|06/26/2019||NR 2019-71||OCC Reports Improvement in Mortgage Performance|