Fed May Regulate Sub-Prime Loans
In a blow to HSBC Finance Corporation and other large sub-prime mortgage lenders the federal government in the United States is considering regulations many thought should have been in place for many years. A “day late and a dollar short” according to consumer advocates, it is not the regulation, but action against shady lenders that may be needed.
Proof of income from borrowers. No penalties for early mortgage payments. And a guarantee that property taxes and insurance bills are covered.
The Federal Reserve is considering these and other measures as a way to remedy the troubled market for high-risk, or subprime, mortgages. The central bank held an all-day hearing on the matter Thursday.
Lawmakers are pushing the Fed to act as late payments and new foreclosures on adjustable-rate home mortgages made to people with spotty credit climbed to all-time highs in the first three months of 2007.
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