HARRISBURG, Pa. – The days of no-doc mortgages are running short in the state of Pennsylvania.

New regulations announced last week by Steve Kaplan, the state's secretary of banking, requires mortgage lenders and brokers to document and verify a borrower's income, fixed expenses and other relevant factors, greatly restricting low- and no-documentation mortgages that lack proof of income, employment and other information.

The regulation also requires mortgage companies to disclose in a new form, available early next year, whether a loan has a variable interest rate, prepayment penalty or balloon payment, property taxes and hazard insurance included in the monthly payment, or a negative amortization feature in which the payments are set so low they do not cover the interest or principal of the loan.

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