WASHINGTON — Credit unions must provide prospective lenders with a mortgage summary within three business days of receiving a loan application, according to a new law that took effect last week.
The summary has to include fees, discount points, interest rate, broker's yield spread premium, prepayment penalties and whether property taxes and insurance are escrowed.
The measure also contains rules for implementing disclosure requirements on nontraditional mortgage products and the federal statement on subprime lending. It also bans negative amortization on nontraditional or subprime residential mortgages, and it bans prepayment penalties extending beyond 60 days before the initial reset of an adjustable-rate mortgage.
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