Federal Reserve tightens mortgage rules to avoid crisis

Shared by Sara on Wed Jul 16, 2008 5:04 am
The Federal Reserve has tightened mortgage rules with the aim to prevent a repetition of the subprime crisis and protect home buyers. The Fed chairman believes high costs loans have been offered to those who weren't financially fit to manage them and this has resulted in a high rate of delinquency. As per the new rules, Any lender should not make loans without proof of one's income. He should check for a borrower's ability to repay the loan from his income and assets. Lenders should restrict their practice of charging prepayment penalties. Let's hope that the new rules will help in consumer protection from frauds and subprime crisis. Source: http://www.mercurynews.com/markets/ci_9886432?nclick_check=1

Community Members Opinion

jerry

Joined: 17 Oct 2005

Moderator
Posts: 1047
Location: MICHIGAN

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Posted: Thu Jul 17, 2008 5:46 am Post subject:

yeah I see some positive efforts are being taken by the Fed. The new rules would come into effect on October, 2009 as I've heard. And they're likely to ban prepayment penalty on subprime loans. So, borrowers would get some relief at least from the hefty fees lenders charge when the former refinance their loans much before the penalty period ends.

Niicss
Niicss

Joined: 03 Oct 2005

Posts: 1260
Location: New Jersey

188.81 Dollars($)

Posted: Mon Jul 21, 2008 3:47 am Post subject:

Hello.

Hope this bill will improve the ethical and professional standards of the industry and weed out the frauds.

So to be a loan officer one needs to-

Quote:

* Attend education courses.
* Pass a criminal background check.
* Pass a test administered by the Arizona Department of Financial Institutions.

_________________
Good is the Enemy of Great.


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