As the October 1 deadline for new mortgage advertising standards looms, the Federal Deposit Insurance Corporation (FDIC) is reaching out to consumers to explain the changes, along with other upcoming changes in mortgage policy. In the latest quarterly edition of its “Consumer News” report, the FDIC outlines new rules for advertising, Truth-in-Lending disclosures and the broker registration requirements outlined in the Secure and Fair Enforcement (SAFE) for Mortgage Licensing Act. Beginning October 1, mortgage lenders cannot advertise a mortgage product as having a “fixed” rate or payment if in fact the rate or payment is subject to change. Lenders must also disclose in advertisements whether minimum payments on specific mortgage products result in a lump-sum “balloon payment” due at the end of the loan term. Published by the FDIC’s public affairs office, the newsletter outlines policies created and enforced by the Federal Reserve and the Department of Housing and Urban Development (HUD). “The new rules recognize that disclosures alone can’t always protect mortgage borrowers from the harm caused by unfair and abusive lending practices,” said Mira Marshall, an FDIC section chief specializing in consumer issues. “Now some specific, clear prohibitions will help safeguard consumers.” The newsletter also provides consumer information on new regulations for credit cards and information about how the FDIC’s deposit insurance program works. Organizations can download the bulletin for free from the FDIC and distribute it to clients. Write to Austin Kilgore.

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