Optional Illustrations Finalized
NCUA announced that the financial regulators have released the final illustrations designed to help consumers understand hybrid adjustable rate mortgage products. As you may recall (and if you do, I'm very impressed), the financial regulators issued a statement on subprime mortgage lending back in 2007. In that statement, they urged financial institutions to provide clear information about the benefits and risks of "hybrid ARM" products. These optional illustrations are designed to help us achieve that recommendation. In NCUA's words:
The illustrations consist of (1) an explanation of some key features of products covered by the Subprime Statement, and (2) three charts with examples of the potential payment shock accompanying these types of loans.
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Institutions are not required to use the illustrations. They may use them, provide information based on them, or provide consumers with information described in the guidance in an alternate format. (Emphasis added.)
You can access the illustrations here.
Now, here's some mandatory guidance: Have a great weekend, everyone.