On Jul. 18, RUS CB committee approved borrower interests standard.
RUS CBBanking Standards Committee approved standard for protection of the rights and legitimate interests of mortgage borrowers, will submit to RUS CB for approval.
Summary
The standard aims to minimize the spread of high-risk mortgage lending schemes and to ensure that borrowers have a clearer understanding of the terms of the loan.
The mortgage standard establishes what information the bank must disclose to the borrower in a simple and understandable form before concluding the agreement.
The person must confirm with a signature that he/she is familiar with this information.
It also sets out the principles for determining the terms of a mortgage agreement, and describes what the lender must take into account when determining the loan terms.
The regulator will review the document received from the Committee within 30 working days, and after approval by RUS CB, the Committee will approve the standard.
Effectiveness
The standard is expected to become mandatory for banks from Jan. 1, 2025.
Sep. 2024 Standard Introduced
On Sep. 23, 2024, RUS CB approved Standard for Protecting the Rights and Legitimate Interests of Mortgage Borrowers adopted by Banking standards committee.
The standard will be mandatory for contracts signed after Jan. 1, 2025, and banks will be required to inform borrowers on cost differences when offering lower interest rates.
If a loan is repaid early, the bank must return any unused part of the compensation.
In Dec. 2024, RUS CB introduced measures for standard violations, see #236553.
