Fed endorses rules to curb shady lending

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

• 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.
• Forcing lenders to make sure that subprime borrowers set aside money to pay for taxes and insurance.
• 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.

We will have to wait and see what happens...

:-)