Wednesday, June 13, 2007

Some Mortgage Lending Practices Could Be Banned

From Reuters:

The Federal Reserve Board is weighing whether it should ban some mortgage lending practices that fueled the recent housing market boom, Fed governor Randall Kroszner told a panel of lawmakers Wednesday. . . . "We will also seriously consider whether there are mortgage lending practices that should be prohibited,"

Kroszner said the Fed was specifically eyeing 'stated-income' loan applications and prepayment penalties, as well as considering whether lenders should require monthly payments of annual fees like taxes.

This is one way to close the "Knowledge Gap".

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