Federal financial regulators issue final illustrations of consumer information for hybrid ARMsMortgagePress.comARMs, Statement on Sub-prime Mortgage Lending, FDIC
The federal financial regulatory agencies today issued final
illustrations for helping consumers understand certain hybrid
adjustable rate mortgage (ARM) products.
The agencies' Statement on Subprime Mortgage Lending (Subprime
Statement), which became effective July 10, 2007, recommended that
institutions provide clear, balanced, and timely information to
consumers about the relative benefits and risks of hybrid ARM
products. The illustrations are intended to assist institutions in
providing this information.
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.
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
The agencies will be posting the illustrations on their web
sites for downloading and printing. In particular, versions of the
illustrations will be posted in English and in Spanish together
with a template of the illustrations that institutions can modify
to reflect the latest market conditions.
The final document, Illustrations of Consumer Information for
Hybrid Adjustable Rate Mortgage Products, may be accessed by