WASHINGTON — The Federal Reserve will issue new rules next week aimed at protecting future homebuyers from dubious lending practices.
Fed Chairman Ben Bernanke said the Fed also may give squeezed Wall Street firms more time to tap the central bank’s emergency loan program.
Under the proposal unveiled last December, the Fed rules would restrict lenders from penalizing risky borrowers who pay loans off early, require lenders to make sure these borrowers set aside money to pay for taxes and insurance and bar lenders from making loans without proof of a borrower’s income. They also would prohibit lenders from engaging in a pattern or practice of lending without considering a borrower’s ability to repay a home loan from sources other than the home’s value. The Associated Press
