As 2007 came to a close, Congress had done a lot of talking about cracking down on unfair and deceptive mortgage lending practices, but didn't deliver on any major legislation. Although there's some consensus that tighter regulations or new laws governing lenders are needed, some lawmakers have been reluctant to impose restrictions that might worsen the credit crunch and the housing downturn. In the meantime, the Federal Reserve has proposed strengthening its implementation of the Truth in Lending Act, through new regulations that would require subprime lenders to verify a borrower's ability to repay a loan after a payment reset; document income and assets; and establish escrow accounts for taxes and insurance for a minimum of one year. The Fed, which has some authority to draft ne...
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