Regulators in at least seven states are moving to adopt guidelines for nontraditional mortgages modeled after those issued by federal bank regulators in September. Georgia, Idaho, Iowa, Massachusetts, Montana, New Hampshire and Wyoming have announced they will adopt or plan to adopt identical guidelines instructing lenders to provide more complete disclosure of loan terms to consumers and to tighten their underwriting standards. The federal guidelines, intended to address concerns about the increased risk interest-only and pay option, negative amortization loans may pose to both borrowers and lenders, apply only to federally chartered banks -- not state-regulated banks and mortgage lenders. When the guidelines were issued, federal officials urged states to issue similar guidelines to ensure all lenders were competing on an even playing field. The Conference of State Bank Supervisors (CSBS) has created a Web page that allows lenders to track which states have adopted their own version ...
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