The Federal Reserve recently approved new regulatory statutes requiring mortgage lenders to disclose to borrowers how much interest rates differ between prime mortgages and the higher-priced subprime loans offered to less-affluent borrowers.

The new amendments to Regulation C require disclosures to prospective borrowers if the spread between prime and subprime rates is equal to or greater than 1.5 percentage points on a first-lien loan or greater than 3.5 percentage points on a second mortgage.
The Fed is attempting to safeguard the nation’s housing market against repeating its recent mistakes. The agency said that in setting the new disclosure thresholds, its focus was primarily on the subprime mortgages, which triggered the current housing crisis, and some say today’s economic depression.
The new rule becomes effective October 1, 2009.