Spend a Lot of Time at Free Republic?
Get a Lot of Information?
Donate what you can afford
Or sign up to donate monthly
and a sponsoring FReeper will donate $10
Urgent: Save Lazamataz! Donate today
Posted on 04/19/2011 9:25:22 AM PDT by NormsRevenge
WASHINGTON (Reuters) - Lenders would be required to make sure prospective borrowers have the ability to repay their mortgages before giving them a loan, under a proposal released by the Federal Reserve on Tuesday.
The rule, which is required by the Dodd-Frank financial reform law, is intended to tighten lending standards and combat home lending abuses that contributed to the 2007-2009 financial crisis.
The rule would establish minimum underwriting standards for most mortgages and lenders could be sued by the borrower if they do not take the proper steps to check a borrowers ability to repay the loan.
The law does provide protections from this type of liability if a loan meets the specific standards that are part of a "qualified mortgage."
In its proposal, the Fed is seeking comment on two possible ways of defining a qualified mortgage.
Under the first scenario the loan could not include interest-only payments, a balloon payment and regular payments could not result in the principle of the loan increasing.
Under the alternative, the loan would have to meet all the standards laid out under the first option and meet additional requirements such as having the lender verify a borrower's employment status and debt obligations.
(Excerpt) Read more at finance.yahoo.com ...
If I lie on my resume and get a job I am not qualified for, can I sue the employer? If I buy a car and am not a good driver, can I sue for any accidents I cause?
“Congress will require the banks to make bad loans to the special people.”
That very provision was part of the 2010 financial services bill. Congress does not need to take any additional action. The rats always protect their people.
No Income, No Asset loans disappeared years ago, along with stated income and subprime loans (for the most part). And every lender we work with already verifies income, credit and assets.
Once again, the Fed is trying to regulate something that's already been taken care of, or is already being done. These folks really don't know their asses from a hole in the ground -- but I sure know which one smells worse.
“All within the state, nothing outside the state, nothing against the state.”
-- Benito Mussolini
Welcome to Obama's America.
Correct.
These changes were made 3 years ago at least.
I'll say. The Federal Reserve has taken at least a Trillion of toxic Mortgage Backed Securities onto its books since Ben has been calling the shots. Not to mention another Trillion of US Treasury Notes and Bonds. The Federal Reserve needs to be audited. It is the largest ponzi scheme in the world, and, like all ponzi schemes, it will have a limited life and come crashing down.
Interesting how neither the author nor the "editors" at Reuters seemingly understand the difference between "principle" and "principal".
The large banks support the leftists, so they are part of the problem. They have no downside.
Pretty much the definition of Economic Fascism — the big companies support the politicians, and the politicians protect the big companies. Everyone wins, except the citizens — power goes to politicians, money goes to cronies, nothing is left over for the voters except empty promises.
Very succinctly put. Not to mention the Democratic denials of Fannie and Freddie being insolvent. Or that the Democratic operatives running the GSEs cooked the books and made off with hundreds of million of bonuses they paid to themselves.
The Government is in control of the mortgage industry now. The purpose of this rule is to create a shared responsibility between the lender and the borrower on the repayment of the loan, opening the door to numerous lawsuits by borrowers (in default) against their lender.
This is wrong on many levels. Bottom line, the already tight mortgage market just became a lot tighter.
Good luck to the housing market and our economy.
Exactly right!
This country is no longer capitalist, it is FASCIST, now, today.
When this comes crashing down, we better be ready to point to the fact that the system that failed was a FASCIST one, not a capital one. Because those unions are ready for it, and will try to use the crash to make this system even MORE FASCIST than it is today.
Time to lay in the ground work of this country is fascist now. And hasn’t been capitalistic for some time.
By something you can’t afford—and sue the seller for it?
do you know how much it costs to proof-read content? ;-)
Women and Minorities Hardest Hit
You hit it, the exempted (like ObamaCare unions and other firms) always move ahead in the line.
it always was that way before affirmative action and the dems got involved in this stuff.
The Government housed, fed, fatherless, educated and medically treated masses in the barrio, ghetto and trailer parks are finally reaching a critical mass.
Tattooed morons who listen to rap and are either Jerry Springer watchers or participants who have no morality or business sense is the product of the 60’s Hippy (Communist) agenda. This is no accident.
Obie is an utter disaster, and he pleads to borrow more so “his people” will not feel the brunt of the fiscal insanity until AFTER November 2012.
It’s all about power and politics, that’s why we need Sarah Louis Heath Palin.
Look, phil gramm and jim leach caused this problem, with their credit moternization act, written for an by Ken Lays attorneys. Jorge bush pushed the loan BS just as much as his democrap friends, his hud speech has been posted here many times.
Disclaimer: Opinions posted on Free Republic are those of the individual posters and do not necessarily represent the opinion of Free Republic or its management. All materials posted herein are protected by copyright law and the exemption for fair use of copyrighted works.