When the Fed Refers to Their Clients, They Are Not Talking about Consumers, They Are Talking about Banks
Fed Plans To Curb Mortgage Excesses Some in Congress Want Tougher Rules
By David Cho Washington Post Staff Writer Saturday, December 15, 2007; D01
The Federal Reserve is set to change home-loan lending practices that are blamed for pushing the nation into a housing downturn, but the effort is expected to fall short of far more stringent efforts by Congress.
The new Fed rules, which may be announced as soon as Tuesday, aim to curb predatory lending and the overuse of exotic home loans without hurting the financial system that backs mortgage lending, according to lawmakers and sources close to the Fed.
. . . Like the measures in Congress, the Fed rules would require lenders to clearly disclose mortgage information to consumers and to raise standards for approving mortgage applications.
. . . For example, lawmakers proposed legislation that would change how home buyers are approved for adjustable-rate mortgages, which have low introductory interest rates that jump after several years. Democra…