Foreclosure panel wants greater disclosure

November 12, 2007
A state legislative panel assigned last summer to study the epidemic of mortgage foreclosures has agreed on several recommendations, according to The Journal Gazette of Fort Wayne.

Lenders would be forced to give potential borrowers a summary of the highest possible interest rate they could be charged.

Lenders also could not charge prepayment penalties for high-risk loans. The ban could help homeowners with adjustable-rate mortgages who would like to refinance, but can't because the penalties prevent escaping the original loan.

Other ideas under consideration include schools' teaching financial literacy to primary and secondary students, boosting civil and criminal penalties for fraudulent lending and violating state laws, and demanding that all names and license and registration numbers of parties involved in the mortgage be consolidated on a one-page document.

Nearly 3 percent of Indiana home mortgages are in foreclosure; only Ohio has a higher rate. The national average is nearly 1.3 percent.
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