In Guidance on Nontraditional Mortgage Product Risks, if the institution has a concentration in a nontraditional mortgage portfolio, the institution should:
If the institution offers both full and reduced documentation loans and there is a pricing premium attached to the reduced documentation loan, the consumer should:
Institutions that offer nontraditional mortgage products should make sure they comply with the following, as applicable, EXCEPT:
Underwriting standards in Subprime Mortgage Lending include:
Below mentioned is the necessary information that should be included in the ___________. Risk of payment shock""potential payment increases; how the new payment will be calculated when the introductory rate expires Ramifications of prepayment penalties""how they will be calculated, when they will be imposedRamifications of balloon payments Ramifications of the lack of escrowing for taxes and insurance""who is responsible for paying taxes and insurance and the fact that their costs may be substantial Cost of reduced documentation loans""whether there is a pricing premium required
To be effective, compliance risk management professionals must design a framework to ensure that bank management understands the risks and the steps that must be taken to mitigate them. The many roles compliance professionals fill incorporate risk management aspects including:
