Penn. Issues New Regs On Mortgage Disclosures
HARRISBURG, Penn.-Pennsylvania homebuyers will benefit from new rules governing mortgage disclosures and practices, according to the state Department of Banking.
"These rules will help to ensure that Pennsylvanians get mortgages that they can understand and repay," said Secretary of Banking Steven Kaplan. "We're trying to prevent a repeat of some of the practices that contributed to the home foreclosure crisis."
The rules are contained in a new regulation that requires mortgage companies to document income, fixed expenses and other relevant financial information to determine if the borrower has the ability to repay the loan. The lender's review of this financial information will restrict low- and no-documentation loans, also known as stated income loans, in which borrowers do not have to provide proof of income, employment and other information. The new rule also requires licensed lenders and brokers to use a simplified, one-page disclosure that calls attention to loan features, such as a variable interest rate or prepayment penalty.
According to the Pennsylvania CU Association, the ruling will not have any effect on credit unions or banks. "It applies to non-depository mortgage lenders that are licensed by the Department of Banking," said Diane Powell, director of communications. "However, credit unions do need to register their mortgage loan officers under the federal registration system."
Powell said that CUs were supportive of the bill.
"We are supportive of legislation/regulation that provides protection to consumers, providing it doesn't cause harm to credit unions," she said.
Foreclosure Mitigation Funds Given
DURHAM, N.C.-Self Help CU was awarded a $2.5-million grant last week under a new federal program that will help the community development credit union finance several initiatives aimed at alleviating the spreading foreclosure crisis in North Carolina.
The funds under the new federal Neighborhood Stabilization Program will provide loan loss reserves for two Self Help CU programs. Under one, the CDCU will lend to people at or below 120% of area median income to help them buy foreclosed properties. The other will provide low-cost loans to non-profit and for-profit affordable housing developers for the purchase and rehabilitation of foreclosed properties.
David Beck, a spokesman for Self Help, said the new funds will help the credit union expand a foreclosure program it has been piloting for the past year in Charlotte to as many as 23 counties around the state.
The grant was among 20 awarded yesterday to North Carolina government and non-government entities for a total of $48.9 million under the new program, which is administered by the U.S. Department of Housing and Urban Development. The program's purpose is to assist those areas hit hardest by the housing crisis.
Romeo Imprisoned For Looting
SALT LAKE CITY-A man was sentenced to 30 months in prison for running off with $110,000 from his fiancee's America First CU account after he left her at the altar.
Prosecutors say 42-year-old John Egan persuaded his fiancée to move to Florida last year to start a new life with him. The woman sold her North Salt Lake condo and furniture before driving to Tampa with her daughter.
She waited for Egan and his son to join her but they never showed up. Instead, investigators say, Egan fled to Mexico with the $109,900 he had withdrawn from the woman's account.
He was arrested in July after a 35-foot sailboat he bought with his fiancee's money and was trying to sail from Mexico to Ireland broke down in Cuban waters.
Egan was charged in U.S. District Court with one count each of bank fraud, computer fraud and aggravated identity theft, all felonies. He pleaded guilty to the computer fraud and ID theft charges.
CU To Merge With Financial Partners
MORGANTON, N.C.-Financial Partners CU has agreed to combine with United Services CU, to create a credit union with $54 million in assets and 12,500 members.
United Services, based in Asheville, has seen its assets shrink from $42.7 million at Sept. 30, 2007 to $36.2 million at year-end 2008, and reported a loss of $232,859 for last year.
Financial Partners reported assets of $18.1 million at year-end 2008 and a slim net of $920.
