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Mortgage & Housing Market News from HSH.com
June 30th, 2008

Senate Passes ARM Amendment

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The Senate unanimously passed an amendment regarding Adjustable Rate Mortgages (ARMs) to the ongoing housing rescue bill last week. Senator Christopher S. Bond’s (R-Mo.) amendment requires lenders and brokers to provide clearer information to consumers regarding ARMs with “teaser” rates. Senator Bond explained ARMs with teaser rates “played a large role in our current subprime mortgage crisis.”

The amendment requires that both lenders and brokers properly explain how high the borrower’s payments might rise after the initial fixed rate expires. Additionally, lenders and brokers must also stress that there is no guarantee they will be able to refinance before the lower, initial rate expires. Senator Bond said many borrowers were unaware of the loans’ specifications, and were falsely assured they would be able to refinance.

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About the HSH Blog

HSH.com's daily blog focuses on the latest developments in the mortgage and housing markets. Our mission is to relate how changes in mortgage rates and housing policy, as well as the latest financial news, impacts consumers, homebuyers and industry insiders alike. Our 30-plus years of experience in the mortgage industry gives us an edge as we break down the latest changes in an ever-changing market.

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Tim Manni

Tim Manni is the Managing Editor of HSH.com and the author of their daily blog, which concentrates on the latest developments in the mortgage and housing markets.

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