Wednesday, December 19, 2007

MSNBC Video: Fed Endorses Mortgage Rules

According to the Associated Press, the Federal Reserve has endorsed new rules that would give people taking out home mortgages new protections against shady lending practices. The Fed proposes:
  • Forcing lenders to make sure that subprime borrowers set aside money to pay for taxes and insurance.
  • Restricting lenders from penalizing certain subprime borrowers — those with tarnished credit or low incomes — who pay off their loans early. The restriction would apply to loans that meet certain conditions, including that the penalty expire at least 60 days before any possible payment increase.
  • Barring lenders from making loans when they don’t have proof of a borrower’s income.
  • Prohibiting lenders from engaging in a pattern or practice of lending without considering a borrower’s ability to repay a home loan from sources other than the home’s value.

Watch the Video-->

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