'Exotic' loans to fetch premium prices

New lending rules punish disadvantaged borrowers

The federal government in the "Restoring American Financial Stability Act of 2010" reversed its long-standing policy of favoring disadvantaged borrowers. Under the new rules, borrowers who can qualify only for mortgages with relatively liberal repayment provisions, which are already priced higher because they are riskier to lenders, will be subject to an indirect cost that will affect only them.