Mortgage Lending Rules
In July 2008, the Fed finalized new rules that apply to mortgage lenders. Fed Chairman Ben Bernanke stated that the rules "prohibit lenders from making higher-priced loans without due regard for consumers' ability to make the scheduled payments and require lenders to verify the income and assets on which they rely when making the credit decision. Also, for higher-priced loans, lenders now will be required to establish escrow accounts so that property taxes and insurance costs will be included in consumers' regular monthly payments...Other measures address the coercion of appraisers, servicer practices, and other issues. We believe the new rules will help to restore confidence in the mortgage market."
Read more about this topic: Federal Reserve Responses To The Subprime Crisis
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