Posted on 12/18/2007 7:29:03 PM PST by phatus maximus
WASHINGTON: The Federal Reserve moved Tuesday to impose tough new restrictions meant to curb unfair and deceptive home-lending practices and prevent a recurrence of the meltdown in subprime mortgages this year.
By a 5-to-0 vote, the Fed approved a plan that would tighten provisions meant to protect borrowers and apply them to a far larger share of home loans - whether from banks, mortgage companies or other lenders - than under current regulations.
The proposed rules underscore the more assertive role the Fed is now prepared to take in regulating lending, a big shift from the central bank's approach in the past. In general, the rules are meant to deter unscrupulous lenders from persuading people that they can afford loans that ought to be out of their reach. By extension, the rules are also intended to keep would-be buyers from deceiving themselves about the debt burdens they can shoulder.
"Our goal is to promote responsible mortgage lending, for the benefit of individual consumers and the economy," said the Fed chairman, Ben Bernanke.
"We want consumers to make decisions about home mortgage options confidently, with assurances that unscrupulous home mortgage practices will not be tolerated."
(Excerpt) Read more at iht.com ...
What? Make a broker or lender legally liable for someone who can't pay? Are you kidding me? This kneejerk reaction to a market correction is absoultely killing me...Before you know it the government will be telling you that you can't get the loan of your choice no matter how much capacity etc you have to repay your mortgage...Ridiculous.
This bill looks like a typical over reaction. Although the bill may have some language to define a broker’s responsibility, a court’s interpretation can be much different. The mortgage industry should be allowed to police itself with limited constraints from the federal government. Investors will scrutinize mortgage securities very closely to force more conservative lending practices.
Dem senators at the root are just shills for trial lawyers, their largest contributors. Their bills are always just disguised loopholes created to expand frivolous lawsuits.
That’s it, tighten lending practices so the rats can scream racism again.
“Creditors would have to establish escrow accounts for taxes and insurance.”
Title of the article really should be, “Fed proposes rules to protect its revenue stream”
How the hell does this ‘protect’ would be home-owners?
U.S. Fed proposes rules to protect would-be homeowners...
no bailout for people who could be foreclosed....
otherwise...how about the people that faithfully pay their mortgages....if they stop paying...do they get a bailout also???
if not...this is discrimination....we need an investigation...a march on Washington...a blue ribbon panel...if the piaps wins.....free mortgages for all!!!!!
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