New Federal Rules on Subprime Loans Issued Lenders may soon be more careful about making home loans to people with tarnished credit. Federal regulators are proposing new guidelines that would discourage some of the riskiest loans to these so-called "subprime borrowers." The crackdown comes as more and more borrowers are falling behind on their mortgage payments.
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New Federal Rules on Subprime Loans Issued

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New Federal Rules on Subprime Loans Issued

New Federal Rules on Subprime Loans Issued

New Federal Rules on Subprime Loans Issued

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Federal bank regulators have released a "guidance" telling issuers of subprime loans that they need to change the way they offer mortgages to borrowers with poor credit.

From now on, lenders who offer adjustable rate mortgages will have to consider whether the borrower can afford the higher payment that results when interest rates go up.

Currently, some lenders are basing lending decisions on the "teaser" rate, and not on where the rate might go.