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Bank Regulators Examine Abusive Mortgage Lenders
Federal and state banking regulators announced a pilot program Tuesday to closely examine lenders that are the biggest players in the subprime loan market.
The goal: Cut down on abusive lending practices that often lead the borrowers to delinquency on their loan payments.
Participating in the program are the Federal Reserve, the federal Office of Thrift Supervision, the Federal Trade Commission, and state agencies, which are represented by the Conference of State Bank Supervisors and the American Association of Residential Mortgage Regulators.
The groups plan to share information, discuss lessons learned, and "take action as appropriate." Based on the results, the groups would decide whether to continue the project.
The announcement of the program, which will begin in the fourth quarter, came a day before Fed Chairman Ben Bernanke is scheduled to give the central bank’s midyear economic forecast to Congress. Lawmakers have criticized the Fed for failing to regulate the mortgage market.
Regulators in 26 states have pledged to adopt lending standards similar to those adopted last month by federal banking regulators, which call on lenders to strictly evaluate borrowers' ability to repay home loans and include consumer protections.
Abogados July 19, 2007 08:51 AM | Preguntas Para Abogados
