by Calculated Risk on 11/14/2006 01:04:00 PM

From the CSBS:

The Conference of State Bank Supervisors and the American Association of Residential Mortgage Regulators have distributed guidance to state agencies that regulate residential mortgage brokers and companies on the risks posed by nontraditional mortgage products. CSBS and AARMR encouraged the state regulatory agencies to adopt the guidance for the organizations they regulate. The CSBS/AARMR guidance is based upon an interagency guidance released on Sept. 29, 2006, by FDIC, the Office of the Comptroller of the Currency, the Federal Reserve, the Office of Thrift Supervision and the National Credit Union Administration. The CSBS/AARMR guidance mirrors substantially the interagency guidance except for the deletion of sections that do not apply to nondepository institutions. “We are hopeful the interagency guidance and parallel state-issued guidance will serve to inform and protect consumers and enhance the safety and soundness of the industry,” said CSBS President and CEO Neil Milner. Consistent guidance for all market participants will provide an opportunity to gauge its influence on consumer behavior and the mortgage market, CSBS added.

Here is the guidance: GUIDANCE ON NONTRADITIONAL MORTGAGE PRODUCT RISKS