July 18, 2007
Three federal agencies and two associations of state regulators are setting up a pilot project to keep an eye on lenders lenders with significant subprime mortgage operations.
The program is scheduled to begin in the fourth quarter of this year and will focus on non-bank subsidiaries of bank and thrift holding companies, as well as the mortgage brokers they work with.
Also, the states will conduct coordinated examinations of independent state-licensed subprime lenders and their associated mortgage brokers.
The agencies will share information about the reviews and investigations, take action as appropriate, collaborate on the lessons learned, and seek ways to better cooperate in ensuring effective and consistent reviews of these institutions, they said.
Those collaborating on the effort are the Board of Governors of the Federal Reserve System, the Office of Thrift Supervision, the Federal Trade Commission, and state agencies represented by the Conference of State Bank Supervisors and the American Association of Residential Mortgage Regulators.
The agencies will evaluate the companies underwriting standards, as well as senior management oversight of the risk-management practices used for ensuring compliance with state and federal consumer protection regulations and laws, including the Home Mortgage Disclosure Act, the Equal Credit Opportunity Act, the Truth in Lending Act, the Real Estate Settlement Procedures Act, the Federal Trade Commission Act, and the Home Ownership and Equity Protection Act.
They may also take corrective or enforcement action.
