Furthering efforts to educate consumers on the potential risks of certain types of mortgage products, the Federal Reserve Board and other federal financial regulatory agencies have proposed new information that would clarify information about subprime loans.
Detailing the potential risks
The other proposed information is a chart that clearly lays out the potential consequences of a mortgage switching to a higher interest rate. The chart uses as an example an ARM that begins with a monthly payment of $1,531 but rises—through interest rate adjustments—to $2,370 after five years.
Public comment sought
August 23, 2007