Fed Unveils Protective New Home Mortgage Proposal

AP:

The Federal Reserve unveiled a proposal Tuesday that would give people taking out home mortgages new protections against shady lending practices.

The proposed rules, recommended by staff and expected to be endorsed by the Fed at its morning meeting, are especially geared to the riskiest "subprime" borrowers, already painfully stung by the housing and credit debacles. The proposal is expected to apply to new, or future, loans made by all types of lenders, including banks and brokers. The plan could be finalized next year.

The Fed, which has regulatory powers over the nation's banking system, is considering:

Read the whole story: AP

Comments

[itolduso]

The Fed has a "PLAN"?! They've come up with "NEW RULES"?! I thought we already had "rules" against falsifying loan applications, fraud, deception, pyramid schemes, false advertising, ect., ect., ect. Investigations, prosecutions and stiff penalties would have stopped this 'crisis' in it's tracks at any point over the past 6 years - If we still had a "free press" headlines would be screaming for criminal investigations of the individuals that originated these loans, the appraisers that knowingly falsified values, the realestate agents and agencies and loan officers that conspired to lure unqualified buyers to overinflated properties that they, themselves, were "flipping" - R.E. agents were the biggest 'investors' in properties- buying up whole subdivisions, and doubling or tripling the asking price when they 'flipped' them within a matter of months. They may not have started this "train wreck"- but they drove it- and they knowingly dragged as many passengers as they could on board, steering unwitting buyers to the most costly and deceptive loan packages in exchange for kickbacks & higher commissions. But we're never gonna see any of them in jail- and there's not one "journalist" asking why.

[dora rice]

I am a poor sucker not much income, not much in the bank, but I bought a house during the housing boom with a 6% fix loan. Now if I could do it, why didn't the rest of the greedy super smart bunch couldn't do it. I tell you why. Because they thought they would be super smart and buy a house with the lowest percent APR and then sell it for profit Well they got caught . Now the taxpayer should bail these idiots out. No way. If you don't know what you doing, have your savings federally insured, have low balances on credit cards, and buy a fricking home you can afford. Otherwise go under. And no help from the government.

[doneflyin]

I live in St. Louis. Sister comes to town for a visit and we go to the local mall to see a movie.
We went to Crestwood Mall which is your usual huge mall with all the cookie cutter shops.
So we are walking the length of the place and sister opines that the mall must be going to close for remodeling because of all the empty store fronts. We counted over 15 empty stores before we stopped because it was depressing.
Also, just 2 weeks before Christmas and there were no people in this mall and this mall is not in a depressed area.
And no, the mall is not closing for remodeling.

I've never seen this and I have been in St. Louis for over 20 years.

[mellene]

Where the heck are these people losing their homes going to go and live? There needs to be some commonsense approach to restructure these mortgages or we'll have way too many homeless people on our streets or in prison. The Congress screwed up in not putting any controls on these mortgages in the past and letting wall st. bundled these and sell the bonds to unsuspecting investors.

[Justinpassing]

Where in the world did they get this guy Bernanke? He came into the post of Fed Chief not having a clue.....j­ust like Brownie into Nawlens. It's waaayyy beyond extraordin­ary....it'­s totally psychotic.

[themodernleader]

Where was the despicable Fed when the housing boom was masking our manufacturing decline, yet kept an incompetent, dangerous President in the White House? The answer can be inferred from the question.
Only incompetent, corrupt, sycophants are permitted in the Bush Administration. The Fed was managed by all of the above.
There will be no serious investigation of the inspiration, conspirators and plan for carrying out the greatest swindle in the history of commerce. And the "corrupt ones" are now quietly destroying evidence and abandoning ship with the full cooperation and printing-press support of the Fed.
Harmful policies and procedures that are rewarded--in this instance massive thievery-- lead an Organization--our Republic--into a ditch that we can hardly get out of.

[mmckinl]

The privately owned and operated Federal Reserve is only 12 years too late!

In 1994 Congress Greenspan to tighten underwriting standards for loans. Ed Gramlich warned about problems early in the 00's,yet nothing was done.

It is time for publicly operated Fed free of the influence of major banks, brokerages and insurance companies.

Glass Steagall needs to be reimplemented separatinng deposit banks from any other form of financial institution.

[Ammobob]

Here's the business headlines from MSNBC, CNN, and Fox:

MSNBC:
-Pace of home construction at 16-year low
-Recession worries weigh on stocks
-Oil falls as Turkish withdraw from Iraq
-Best Buy’s quarterly profit up 52 percent
-Housing slump might usher in recession
-Taurel to step down as CEO of Eli Lilly
-Goldman’s profit boosted by mortgage trades

FOX:
-Goldman's 'horrible' Nov. Points To More Credit ...
-FirstEnergy Board Hikes Quarterly Dividend To 55 Cents
-Fed Announces Rules to Protect Homeowners From Shady ...
-Congress to Vote on Higher Auto Mileage Standards
-MGM, New Line, Peter Jackson Plan To Make 'The Hobbit'
-Big Blue to Generate More Green Thanks to Services

CNN:
Stocks give up gains | Treasurys up on ECB infusion
• Fed tightens up lending rules
• Street punishes Best Buy's success | Earnings
• Toyota Tundra takes 'Truck of the Year'
• New Sprint chief was Ma Bell's star
• New job, mystery boss
• Money - That's what I want
• New home construction drops
• Prosecutors loaded for Bear Stearns
• Help! My 401k is losing its value

So MSNBC leads with 2 overt RECESSION headlines and one related. FOX none. CNN one, maybe. MSNBC peddling doom and gloom. A recession has alot to do with 'attitude' that's where retail sales and consumer confidence comes from.

[Dap]

==

NOW... Who would have thunk it...?

Fat Cats getting fatter... Imagine that.

[robinhood1]

Better late than never. Where was Allan Greenspan when all these toxic loans were being given out?

[outnow]

Let 'em BK out with a "cram down." That'll teach those lenders to lend to poor risks. Bundling the poor risk loans and rating the bundle triple A is fraud. Fraudulent appraisals, lack of any verification of income, bad credit, no income - this was all done so that Bush could fight his war and boost consumer spending to prop up the economy. We all knew this. Real Estate was the new bubble that was being manipulated.

Just like the Savings and Loan fiasco. Look to see who profited off this fiasco - those who got out early.

[EinChicago]

Ben is throwing out the baby with the bath water. It's a good start, but way too extreme in some cases. For example, NINJA loans weren't necessarily the problem; it was the abuse of NINJA loans. I kno wseveral self-employed people who make substantial incomes but needed to use NINJA loans because of the lack of standard documentation.

[curiousasheck]

Well anyway the moral to the story.

"You can lie but you can't hide"

[curiousasheck]

"Chief Ben" . . . Why don't you start with . . Lowering interest rates on mortgages. Taming inflation. Giving us a stronger dollar. Stimulating greater home sales. Stabilizing the stock market. Helping banks deal with their massive debt-loads.

Then you'll be a Hero.

[thegreatgiginthesky]

I hope this Bernanke the bald assclown gets the shit beaten out of him by poor people who have lost their homes.