Fed moves to curb housing abuses
The U.S. central bank recommends new rules to limit compensation for mortgage brokers and clarify risks for borrowers.
WASHINGTON (Reuters) -- The Federal Reserve Board Thursday recommended new disclosure rules for homeowners and compensation guidelines for mortgage brokers to correct some abuses of the recent runaway housing market.
Prospective borrowers would receive a one-page notice of key questions about their loan and see a graph comparing their interest rate to that of a low-risk borrower, the Fed said.
Mortgage brokers would not receive greater compensation if they put a borrower into a high-cost loan, under the rules.