| The state Department of Financial Institutions announced that it will adopt a set of standards designed to help protect state consumers. In addition to the Statement on Subprime Mortgage Lending, state regulators plan to issue Examination Guidance for regulators to use in evaluating state-licensed mortgage lenders’ compliance with the new requirements on lending to subprime borrowers.
A subprime lender charges a finance rate that is higher than the “prime” rate offered by conventional lenders. Typically, it is a lender who approves loans for people who may have poor credit history or no credit history so they don’t qualify under the conventional mortgage system.
The new standards cover underwriting, management practices and consumer protection provisions. Mortgage originators should follow these standards when marketing and selling certain adjustable-rate mortgage products, especially to subprime borrowers. | 
