Guidance To Vermont Licensees On Nontraditional Mortgage Products

This guidance mirrors the guidance offered by the federal banking agencies on nontraditional mortgage products.  This bulletin clarifies how mortgage brokers and licensed lenders can offer nontraditional mortgage products in a way that clearly discloses the risks that borrowers may assume.  These products, referred to variously as "nontraditional," "alternative," or "exotic" mortgage loans, include, among other loans, interest-only mortgages and payment option adjustable-rate mortgages.  It includes guidance on loan terms and underwriting standards, risk management practices, consumer protection issues, and recommended practices.