December 31st, 2007 9:04 AM by Lehel Szucs
Key points of Fed plan
Highlights of the Federal Reserve's proposal on mortgage loans:
For sub-prime loans:
* Lenders would be barred from making loans without considering the ability of borrowers to repay them.
* Lenders would be required to verify the income and assets of borrowers.
* Prepayment penalties would be restricted to loans that meet certain conditions.
For all loans:
* Written disclosure of bonuses paid to brokers who sell loans to consumers at higher interest rates than they qualify for.
* Lenders and brokers would be barred from coercing or encouraging appraisers to misrepresent the value of a home.
* Lenders would be required to credit a payment when it is received, and to provide a payoff statement within a reasonable period of time.
Source: Federal Reserve