The Federal Reserve along with other government agencies, released new guidelines on friday meant to stop abuses in high-cost mortgage, according to the Los Angeles Times.

The new guidelines, which mirror a proposal made last march are;

• Fully consider a borrower's ability to repay a loan at its fully indexed rate, including costs like taxes and insurance.
• Verify a borrower's income, rely on documented information not verbal representations.
• Allow borrowers to refinance without incurring prepayment penalties at least 60 days before the initial reset date of the loan payment.

Regulators apparantly believe that issuing guidelines like these will lessen the impact of higher cost adjustable rate loans, which are being blamed for increased mortgage defaults in some areas.

Please comment if you are in the loan industry. Specifically I'd be interested in seeing how these new guidlines will affect the industry (if at all) and if these guidelines are really "regulations", if not will they even be implimented?