Fed Proposes Changes to Mortgage Disclosure Law
November 16, 2009 - 6:30 PMThe Federal Reserve is proposing to exempt some investors from a requirement that consumers receive notice within 30 days after their home loan is sold or transferred to a new mortgage company.
The requirement, included in legislation signed by President Barack Obama in May, means investors who buy mortgages now have to give consumers written notice that they are collecting payments.
Congress passed the law amid concerns that many consumers do not know who owns their home loan, especially since many are sold to investors as part of complex mortgage securities.
Under the Fed's proposed interpretation of the rule published Monday, the disclosure requirement will apply only if an investor acquires legal title to loan. That excludes those who only acquire a partial interest, such as investors in mortgage-backed securities.
The Fed proposal is open to public comment for 60 days.
(Copyright 2009 Associated Press. All Rights Reserved. This material may not be published, broadcast, rewritten, or redistributed.)