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Subject: Nontraditional Mortgage Products
Date: August 21, 2007
To: Chief Executive Officers and Compliance Officers of All National Banks, Department and Division Heads, and All Examining Personnel
Description: Illustrations of Consumer Information
The guidance attached to this bulletin continues to apply to federal savings associations.
On June 8, 2007, the Office of the Comptroller of the Currency (OCC), along with the Board of Governors of the Federal Reserve System, the Federal Deposit Insurance Corporation, the Office of Thrift Supervision, and the National Credit Union Administration jointly published in the Federal Register final guidance entitled "Illustrations of Consumer Information for Nontraditional Mortgage Products." The illustrations are intended to assist institutions in implementing the consumer protection portion of the Interagency Guidance on Nontraditional Mortgage Product Risks (interagency guidance). See OCC Bulletin 2006-41 (October 4, 2006).
The illustrations are intended to show the type of consumer disclosures that the interagency guidance contemplates for interest-only loans and payment option adjustable-rate mortgage products. Institutions may, at their option, elect to use or not use the illustrations, or to provide information based on the illustrations, but tailor the information, as appropriate.
The three illustrations show how important information about nontraditional mortgages could be provided to consumers in a concise manner and format. The first illustration outlines key facts about interest-only and payment-option mortgages in a narrative format. The second illustration contains a chart comparing sample mortgage features. Finally, the third illustration contains explanatory information that could be provided with a monthly statement.
To facilitate use of these illustrations by national banks, the OCC has: posted the illustrations on its Web site in a form that may be easily downloaded and printed; posted a template for Illustration No. 2 that may be downloaded and modified to reflect, for example, current market conditions; and posted a Spanish language version of the illustrations.
The illustrations may be obtained from the following Web site.
If you have any questions about the illustrations, please contact the Community and Consumer Law Division at (202) 874-5750.
Emory W. Rushton