New lending rules planned
The Federal Reserve plans to propose new lending rules on Tuesday to prevent some of the practices -- common during the housing boom -- that it believes are abusive, the AP reports today:
The Fed is considering:--barring lenders from penalizing subprime borrowers — those with spotty credit or low incomes — who pay their loans off early.
--forcing lenders to make sure that borrowers, especially subprime borrowers, set aside money to pay for taxes and insurance.
--restricting loans that do not require proof of a borrower's income.
--examining lenders' failure, in some cases, to consider a borrower's ability to repay a home loan.
--improving financial disclosure so people better understand the terms and conditions of their mortgages and get this information when it is most useful.
--curtailing abuses in mortgage advertising.
