Highlights of new mortgage lender rules

Here are highlights of new federal rules for mortgage lending, which take effect Oct. 1.

For subprime mortgages

* Lenders will be required to verify a borrower's income and assets.

* Lenders will be barred from levying prepayment penalties for the first four years of any adjustable-rate subprime mortgage; other subprime mortgages could have no prepayment penalties for two years.

For all mortgages

* Lenders won't be allowed to run advertising that compares different loans unless all payments and rates are also disclosed.

* Advertising that touts mortgage plans in a foreign language would be required to include legally required disclosures in that same language.

* Lenders would be required to credit borrowers' payments on the day of receipt.

Source: Times research

Los Angeles Times