Industry NewsMortgage

Obama backs uniform loan disclosure

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The Obama administration today released details of plans to combat "the worst abuses in mortgage markets" by creating a new Consumer Financial Protection Agency to safeguard consumers from deceptive practices and provide them with concise information for comparing mortgages and other loans.The agency would have the power to set standards protecting consumers and encouraging competition, and the authority to make sure consumer-protection regulations "are written fairly and enforced vigorously," the Treasury Department said in a press release. The Consumer Financial Protection Agency might, for example, develop guidelines for simple "plain vanilla" mortgages with predictable payments, require a "duty of care" for mortgage brokers, and ban "yield spread premiums" -- rebates paid by lenders when mortgage brokers place borrowers in high-interest-rate loans.The new rules would serve as a floor, not a ceiling pre-empting states from passing...