We held a public hearing on June 14 to discuss industry practices, including those pertaining to pre-payment penalties, the use of escrow accounts for taxes and insurance, stated-income and low-documentation lending, and the evaluation of a borrower’s ability to repay. The discussion and ideas we heard were extremely useful, and we look forward to receiving additional public comments in coming weeks.
Based on the information we are gathering, I expect that the Board will propose additional rules under HOEPA later this year. In coordination with the other federal supervisory agencies, last year we issued principlesbased guidance on nontraditional mortgages, and in June of this year we issued supervisory guidance on subprime lending.