Fed Chairman Ben Bernanke provided a preview of the Fed's new rules during a speech Tuesday at the FDIC Forum on Mortgage Lending for Low/Moderate Income Households in Arlington, Va. Under the Fed's authorities, the Home Ownership and Equity Protection Act, the rules -- which will apply to all lenders, not just banks -- are expected to, among other reforms:
- Restrict lenders from penalizing high-risk borrowers who pay off loans early.
- Bar lenders from making loans without proof of a borrower's income.
- Require lenders to make sure that borrowers set aside money to pay for taxes and insurance.
Economist Peter Dawson told BloggingStocks he's taking "a wait-and-see approach" regarding the Fed's mortgage regulation revisions. "This set of revised regulations could be, arguably, the most important federal regulation change, in financial terms, since the last plan to maintain the solvency of the Social Security trust fund," Dawson said.

You just have to love the U.S. -- marketing runs the majority of the world's largest economy, and when subprime lenders began using low interest rates to push shoddy mortgages onto clueless homebuyers years back, millions jumped on the bandwagon. If you weren't flipping houses for a living, you were getting into a much larger home with the feeling that those larger payments and mortgage term resets were years off. We're here now, and foreclosures are up while homeowners are losing their collective shirts. Is it the housing equivalent of the Titanic sinking? Nah -- but that's what many of the media portray it to be.









