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Home » Store » News » OTS Rule to Produce Fewer ‘Alternative’ Loans

OTS Rule to Produce Fewer ‘Alternative’ Loans

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State chartered creditors should expect to see a substantial decline in prepayment penalty fees and increased compliance costs as a result of rule changes to the Alternative Mortgage Transaction Parity Act, a Wall Street rating agency warned. An analysis by Moody’s Investor Service indicated that, over time, prepayment penalty fees on subprime loans would drop by 15 to 25 percent as state lenders make fewer loans with a prepayment feature to avoid violation of
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