dcsimg
   Facebook


rebuild.org finance news:

Back to Latest News Headlines

Fed to Protect Homeowners from Mortgage Abuse

[Jul 25, 2007.]

 

The chairman of the Federal Reserve Board is determined to ensure that prospective homebuyers are shielded from lending practices that could be considered abusive—a move that some legislators say is long overdue.

In an appearance before the Senate Banking Committee, Ben Bernanke said, "A lot of the subprime mortgage paper is not, you know, as good as was thought originally." Bernanke said there will probably be serious financial losses as a result of homeowner delinquencies. Subprime-connected credit losses could run in the neighborhood of $100 billion.

Subprime mortgages are offered to borrowers with troubled credit histories. Both investors and legislators are concerned that, in the past, the Federal Reserve Board has been negligent in overseeing the subprime market. Subprime mortgage holders are finding it increasingly difficult to make payments, resulting in an upsurge in late payments and foreclosures. In fact, Bernanke said the troubles are "likely to get worse before they get better."

The subprime mortgage crisis has been so severe that some lenders—more than 30 in all—have been catapulted into bankruptcy. Yet, while the news about subprime mortgages has been troubling, apparently it wasn't bad enough to affect investors, who contributed to a record Dow Jones.

Meanwhile, the Fed is investigating the subprime situation and is trying to come up with recommendations to assist prospective homebuyers. These recommendations could include restricting loans that do not require proof of income as well as limiting financial penalties for homeowners who make their payments early.

The chairman of the Banking Committee, Sen. Chris Dodd (D-CT), indicated the Fed's actions were a step in the right direction.

"I trust and expect that it will result in significant action by the Fed to ensure that every American who seeks to buy a home will receive fair, reasonable and responsible treatment by his or her lender," Dodd stated.



Julie Ann Amos
July 25th 2007
Recent News


  • New Hope on the Credit Card Front
    While the housing market appears to be sluggish and the overall economy may appear to be a mixed blessing, the outlook appears to be bright for credit card companies and their cardholders. [July 19th 2007]

  • Low Interest Rates May Not Affect Stocks the Way We Thought
    While there are plenty of reasons for those in the financial community to support low interest rates, now comes word that such rates may not have the effect on stocks that investors have come to believe. [July 19th 2007]

  • College Graduations Bring Decisions About Student Loans
    A number of college graduates are venturing into the job market this summer, hoping to earn enough money to start paying back their student loans. [July 17th 2007]

  • Experts Recommend Comparison Loan Shopping This Season
    This summer, financial experts are recommending that consumers shop around when it comes to student loan consolidation. [July 17th 2007]

  • State to Offer Students a Financial Incentive on Loans
    A number of government entities these days are trying their best to make school financing a bit easier for college students. [July 17th 2007]

  • Congress Poised to Tackle Student Loans
    The $85 billion-dollar student loan industry is now under Congressional scrutiny. Education committees in the Senate and House have O.K.'d legislation designed to overhaul the country's student loan program. The overhaul is designed to help increase financial aid to students and make it easier for recent college graduates to repay their loans. [July 15th 2007]

  • Student Loan Financial Group Announces Rate Increase
    Student Loan Financial Group says interest rates on variable-rate student loans will rise eight basis points to .08 percentage points on July 1 st. Therefore, student borrowers with older variable-rate loans are being encouraged to apply for loan consolidation by June 30 th to take advantage of the lower rate. [July 15th 2007]

 

news subscription:

Easily subscribe to the rebuild.org news feed.

Read our news without even visiting our site!

Feedburner
Subscribe to our news

 

news archive:

Rebuild.org monthly news archive