Attn Captain Obvious | Fed Proposes Rule that Would Require Creditors to Determine a Consumer’s Ability to Repay a Mortgage BEFORE Making the Loan

Lenders would be required to make sure prospective borrowers have the ability to repay their mortgages before giving them a loan, under a proposal released by the Federal Reserve on Tuesday.

What kind of back-assward world do we live in when the FED has to propose a rule like this?

Release Date: April 19, 2011

For immediate release

The Federal Reserve Board on Tuesday requested public comment on a proposed rule under Regulation Z that would require creditors to determine a consumer’s ability to repay a mortgage before making the loan and would establish minimum mortgage underwriting standards.

The revisions to the regulation, which implements the Truth in Lending Act (TILA), are being made pursuant to the Dodd-Frank Wall Street Reform and Consumer Protection Act. The proposal would apply to all consumer mortgages (except home equity lines of credit, timeshare plans, reverse mortgages, or temporary loans).

Consistent with the act, the proposal would provide four options for complying with the ability-to-repay requirement.

  • First, a creditor can meet the general ability-to-repay standard by considering and verifying specified underwriting factors, such as the consumer’s income or assets.
  • Second, a creditor can make a “qualified mortgage,” which provides the creditor with special protection from liability provided the loan does not have certain features, such as negative amortization; the fees are within specified limits; and the creditor underwrites the mortgage payment using the maximum interest rate in the first five years. The Board is soliciting comment on two alternative approaches for defining a “qualified mortgage.”
  • Third, a creditor operating predominantly in rural or underserved areas can make a balloon-payment qualified mortgage. This option is meant to preserve access to credit for consumers located in rural or underserved areas where banks originate balloon loans to hedge against interest rate risk for loans held in portfolio.
  • Finally, a creditor can refinance a “non-standard mortgage” with risky features into a more stable “standard mortgage” with a lower monthly payment. This option is meant to preserve access to streamlined refinancings.

The proposal would also implement the Dodd-Frank Act’s limits on prepayment penalties.

The Board is soliciting comment on the proposed rule until July 22, 2011. General rulemaking authority for TILA is scheduled to transfer to the Consumer Financial Protection Bureau on July 21, 2011. Accordingly, this rulemaking will not be finalized by the Board.

Highlights below…

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4closureFraud.org

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Highlights of Proposed Ability-to-Repay Rules

Comments
30 Responses to “Attn Captain Obvious | Fed Proposes Rule that Would Require Creditors to Determine a Consumer’s Ability to Repay a Mortgage BEFORE Making the Loan”
  1. THE REAL MAGGIE says:

    WHERE I LIVE THEY R ALL SKULLS AND BONES@AOL.COM

  2. Louis Bruno says:

    This is the sort of development that ought to be broadly protested in all of the media. These requirements have been prominently featured in all of the regulator’s regulations and lending statutes for a very long time, and tend to be included again in almost every state’s requirements for a valid loan.

    It is time that the regulators get called on this practice of simply re-issuing the rule (as if it were new) rather than enforcing it. If this were stressed in the news, it would become clear that that regulators must choose between claiming incompetence or admitting indifference.

  3. Katheryn says:

    me thinks that bernank and buddies should be thrown in jail and madoff should be promoted to jail watchdog

  4. l vent says:

    Again I just have to reiterate Bernie Madoff is trying to tell the American people to WAKE UP!! The entire country IS A GIANT PONZI SCHEME. The whole country is on the float and that mess was created by the FOREIGN MULTINATIONALS. The NYSE/EURONEXT is a GIANT PONZI SCHEME/ SCAM MACHINE designed to ROB ALL OF US and make the ELITE richer and even more powerful so that they can continue the ongoing MASSIVE CORRUPTION OF OUR OWN GOVERNMENT. That is how they are getting away with it. ABSOLUTE POWER, CORRUPTS ABSOLUTELY!! These foreign multinational NEW WORLD ORDER criminal bastards are hiding everywhere. They are the ratings agencies, Moody’s, S&P. the Federal Reserve/Wall Street/Goldman sucks, AIG, the former Lehman Brothers, they are the SEC. It is time for the UNITED STATES OF AMERICA to stand up and tell our Government, we have had ENOUGH OF THE FOREIGN MULTINATIONALS, THEY HAVE HIJACKED AMERICA AND WANT TO BANKRUPT IT. AMERICA IS NOT BROKE. WE DO NOT NEED THEM. THE UNITED STATES OF AMERICAN CAN STAND ON ITS OWN TWO FEET. It is way past time to THROW ALL OF THE MULTINATIONAL FOREIGN OWNED ENTITIES OUT OF AMERICA. THROW MULTINATIONAL FOREIGN OWNED AND OPERATED, TIMOTHY GEITHNER OUT OF THE U.S. TREASURY DEPT. Appoint a new AMERICAN TREASURY SECRETARY. ISSUE OUR OWN CURRENCY. WE THE PEOPLE WILL NEVER ACCEPT A ONE WORLD CURRENCY issued by the SAME CRIMINAL ENTERPRISE THAT ROBBED AMERICA, the IMF, WORLD BANK. A WORLD CURRENCY IS UNCONSTITUTIONAL. AMERICA IS A SOVERIEGN NATION UNDER THE U.S. CONSTITUTION. We The People of the United States of America OWE NO ALLEGIANCE TO THE UN/NEW WORLD ORDER. GOD BLESS AMERICA.

  5. BlaqRubi says:

    Silly Wabbits! They think WE don’t know these LAWS are ALREADY in place! The BANKS are NOT REGULATED so they EXPLOITED them. Geitner and Bernake deserve a REAL Jail cell next to Greenspan’s and not a country club jail either.

    The ONLY resolution is the BANKS must be REGULATED. Greenspan DEREGULATED BANKS and what we are experiencing is the RESULT of DEREGULATION. Was I the only one who noticed how Greenspan was suddenly GONE then we had Bernake???

    This is a bunch of hog wash designed to keep the criminal ass banks to CONTINUE their fraudulent practices which continue as we speak. Home ownership has become a ponzi scam. I for one will not stand for it.

    • THIS GOES ALOT FURTHER THAN THE BANKS……WHAT IS HAPPENING IS BEHIND IT ALL…BEHIND THE FEDRAL RESERVE AND ALL GOVERNMENT…AND COURTS. ANY AND ALL CHANGES AND NEW RULES BY THE FEDERAL RESERVE IS JUST A STALL TACTIC…A FRONT….ORDERS GIVEN TO EACH AND EVERYONE OF THEM….FROM THE EVIL SECRET SOCIETY…THEY ALL ARE MEMBER OF THIS SOCIETY….WE KNOW WHAT THEY HAVE DONE…IN THE PAST AND NOW WITH THE FORECLOSURE AND PLAN THE FOOD SHORTAGE THAT IS BEING TALKED OF…WAKE UP….THEY WANT MILLIONS OF PEOPLE IN THIS WORLD…OUT..GONE…DESTROYED…. THEY WANT A PERFECT WORLD TO CONTROL….THE FORECLOSURES ARE A DISGUISE PLANNED TO KEEP EVERYONE BUSY FIGHTING ALL WHILE THEY FINISH THEIR FRIG’EN PLAN TO DESTROY….TO GET RID OF….HOW CLEAR CAN SOMEONE TRY AND WAKE AMERICA UP….OTHERS ON THIS FORUM HAVE TOLD OF THE SECRET SOCIETY…OVER AND OVER… YET IT DOES NOT SINK IN SOME PEOPLE…IT IS A MATTER OF LOOKING THRU THE PROBLEMS TO THE SEED THAT HAS CA– USED THE PROBLEMS…..THE SEED THAT IS UNDERGROUND AND GROWING THEIR PLANS STATE THAT ASSETS WILL BE SEIZED WITHOUT TRIAL AND NO PROOF OF GUILT NEEDED. …….. http://www.theforbiddenknowledge.com/hardtruth/committeof300.htm FURTHER PROOF…..GOOGLE BILL GATES….YOUTUBE HIS NAME…..SHOCKING……….

      • THIS IS NOT SOMETHING THAT HAS BEEN HIDDEN…OBAMA SPOKE OF IT IN HIS SPEECHES…HE PREACHES IT TO THE WORLD AS HE PRETENDS TO TRAVEL LOOKING FOR JOBS TO COME BACK TO AMERICA…..THERE WILL BE NO BORDERS….A NEW WORLD CURRENCY…NO MORE AMERICA… ONE GOVERNMENT…..HE MAKES IT SOUND SO GOOD…WHAT HE FAILS TO TELL IS THE BAD PART…AND HE FULLY KNOWS IT ALL….NOTICE HE IGNORES NO JOBS…HAS DONE NOTHING…HAS DONE NOTHING FOR THE HOMEOWNERS….LEAVES ON VACATIONS AND SPEAKS OF TROUBLE IN OTHER COUNTRIES…LIKE WE GIVE A SHIT WHEN WE HAVE MANY TROUBLES RIGHT HERE AND HE COULD CARE LESS…HE FOLLOWS THE ORDERS GIVEN AND SO HAVE ALL PAST PRESIDENTS AND VICE PRESIDENTS….AND THE REST ALL FOLLOW THEM ALSO. I READ GO BACK 5 PRESIDENTS…AND VICE PRESIDENTS….THEY ALL WERE AND .ARE MEMBERS….SKULLS AND BONES ARE MEMBERS….THE CLINTONS… DISGUSTING…….

      • l vent says:

        RIGHT ON, MARILYN!!!!!!!!!! I’M WITH YOU!!! DEATH TO THE TYRANNY!!!!!!!!!!

      • Katheryn says:

        But how? No one is listening!

      • KATHERYN….THE PEOPLE BETTER START LISTENING…..THESE FORECLOSURES WITH COUNTS IN THE MILLIONS ARE THE ‘ PLAN ‘ THAT HAS COME TO THE FRONT…IT LAID IN THE BACK BEHIND A CURTAIN LONG ENOUGH….THE FORECLOSURES, ….THEY ARE A DISTRACTION …GET THAT…A DISTRACTION… TO KEEP THE PEOPLE BUSY WORKING ON FORECLOSURES…..THIS IS DEEP SHIT….FRIG THE FORCLOSURES…PUT THEM TO THE SIDE FOR NOW TILL IT’S YOUR TURN TO FIGHT THEM IN COURT…..THE REAL ISSUE IS WHAT THE FEDERAL RESERVE IS HIDING…THE GOVERNMENT IS HIDING….EVERYONE OF THEM…CRIMINAL CROOKS ……RIGHT ALONG WITH THE BANKSTERS. THIS CRIMINAL PLAN HAS BEEN GOING ON FOR YEARS AND YEARS….WE TRUSTED THE WRONG PEOPLE…READ WHAT IS HAPPENING AND ALSO WHAT HAS HAPPENED BEFORE NOW…..TO SAVE AMERICA..GET WITH IT NOW….2012 IS SUPPOSE TO BE HELL IF WE DON’T FACE THE FACTS…STOP BEING IN DENIAL…EVEN MADOFF SAID FOR AMERICA TO WAKE UP…HE KNOWS MORE THAN YOU THINK…..I READ WHERE THIS MAY BE OUR LAST PRESIDENT….JP MORGAN WAS THE BANK IN FRANCE THAT .KEPT ALL THE JEWS MONEY AS THEY WERE LED OFF TO THE CAMPS TO DIE…AND JP MORGAN WAS WITH HILTER. THE NAZI’S, BACKING HIM WITH THE MONEY TO FIGHT AMERICA….SO WE HAVE A BANKING SYSTEM THAT HAS TIES TO THE FEDERAL RESERVE THAT HAS TIES TO THE SECRET SOCIETY THAT IS SPREAD OUT IN THE WORLD…..http://www.theforbiddenknowledge.com/hardtruth/committeof300.htm OPEN YOUR EYES FOLKS….WE NEED TO DEMAND ……PROTESTS AT THE WHITE HO– USE….BANKS…FEDERAL RESERVES….STATE GOVERNMENTS….COURTS….WE NEED CONTROL….THEY ALL ARE LYING TO US. THEY HAVE ROBBED ALL OF US OF EVERYTHING….NOTHING IS LEFT BUT OUR POWER AND STRENGTH…– USE IT NOW.

      • Katheryn says:

        Does anyone have a way to stop it outside of a revolution. You would have to have most of the population on board to have any chance. A few thousand scattered people would just be murdered or jailed. Do you believe that the Senators and Congress people all know this and would willingly go along with it? They too would just be pawns. Same with the gov. employees, the people of the legal system and most everyone else. This goes way beyond the ponzi scheme, obviously. So, if the rest of the population does not care about how blatantly the law has been broken and there is no sense of outrage only animosity at the “deadbeats”, how would you get anyone on board with the NWO stuff? Just playing devil’s advocate here. I would have to say, and it’s just my opinion, that if all of this is true, then I believe that what was told in Revelations is just beginning. It is the last war between good and evil.

  6. Officer of the Law says:

    This is one of the oldest tricks in the how to book of government corruption. Instead of holding your partners in crime accountable, you pretend that a new rule or law is needed to protect everyone in the future, and then, you and your co-conspirators laugh your asses off and continue robbing and stealing.

    It is really too bad that no one knows how to push the crooked prosecutors to prosecute the banksters and their minions. I understand that the attorneys involved are scared of losing their licenses, but what do the non-attorneys have to lose other than their homes, their life savings, and their credit ratings, things which the banksters and their minions are already trying to steal.

    Of course, everyone could just keep begging and pleading and hope for a different result, but didn’t Einstein say that was the definition of insanity?

  7. l vent says:

    Ben Bernanke is one of the most deceptive and evil criminals of all, and he works for the UN/NEW WORLD ORDER ongoing CRIMINAL ENTERPRISE OF FRAUD, and he is the head of the FRAUDULENT FEDERAL RESERVE BANK.. He is robbing the AMERICAN people BLIND everyday and many do not even realize what he and the NEW WORLD ORDER FEDERAL RESERVEBANK OF FRAUD/WALL STREET CRIMINAL ENTERPRISE ARE DOING. Not only are they causing massive inflation and a devaluated currency they are trying to BANKRUPT AMERICA by creating tons of debt for the people to repay through the FEDERAL RESERVE BANK/ NYSE EURONEXT MARKET MANIPULATION.. BEN BENANKE IS A FINANCIAL TERRORIST!!! LOCK HIM UP!!!! DEATH TO THE FEDERAL RESERVE BANK/WALL STREET FASCIST TYRANNY!!! THEY ARE MAKING ALL OF US ALL POOR AND THEY ARE ROBBING ALL OF US BLIND!!!!

  8. Stupendous Man - Defender of Liberty - Foe of Tyranny says:

    TILA and HOEPA (found in subpart E) as they are currently written are found here:

    http://www.fdic.gov/regulations/laws/rules/6500-1400.html#fdictail

    Typical in our current mess. More regulations are offered but there is still no substantial enforcement of current regulations.

  9. 1ofthemany says:

    Fed psychobabble as always, true as Kevin stated above, they loan us nothing as our homes have been paid for many times and we are still being placed on the chopping block so they ALL get a piece of nothing as that is all we have left…Nothing, when will they learn, we have had to learn in a very hard way while doing our best to stay above water due to the designed downturn in everything we trusted to be real in our country. Now they have no trust from “The People”. Now we have extreme knowledge due to diligent sites as this and others, although we have been beaten to a pulp but not to death YET!!!! Still fighting and still believing in ourselves as a nation of good. We citizens could and will do better than the high paid mouth pieces paid for for by what is left of the TAX dollars and now they want more, and they are just like and ignorant dumb downed people they do control. This will not work for them as we have fortitude gained “by design” from their filthy tactics.

  10. l vent says:

    Borrower’s should really think about if these FOREIGN-OWNED pretender lender’s even deserve your business. Not only is the entire mortgage loan “floated”, but then they gamble off of that float which causes hyper inflated home values and financial crashes. The entire mortgage industry is a giant sham and a fraud, a completely broken business model. Certainly there were some borrowers that FOREIGN-OWNED pretender lenders falsely floated mortgage loans to that clearly did not qualify and that was the set up for all good risk borrowers and investors to fail and that also lead to the robbery and caused the financial collapse..That was the PONZI SCHEME. The practice of FOREIGNER pretend lending must be stopped. A FOREIGN OWNED pretender lender should never again be allowed to bundle up floated mortgage loans and sell these to any investors, esp. foreign investors. They esp. should never ever again be allowed to bet on every aspect of that float. The SHADOW GOVERNMENT/PRETENDER LENDER FANNIE/FREDDIE should never again be allowed to come near an American citizen and give them a FAKE, FRAUDULENT MORTGAGE, and then be allowed to FAKE SECURITIZE THAT FAKE LOAN, SELL THAT PIGS AND CRAP FRAUD to any INVESTORS like peoples PENSION FUNDS ,.and then gamble off of that FAKE, UNSECURITIZED FRAUD UP ON WALL STREET. That very act of using the American People as a credit card for FOREIGNER OWNED FANNIE/FREDDIE to commit rampant, pernicious FOREIGN BACKED mortgage fraud has caused a National Security risk. I believe these HIDDEN FOREIGN ENTITIES posing as AMERICAN mortgage lenders, intentionally set America up for a NEW WORLD ORDER takeover. RESCIND OUR FAKE MORTGAGE LOANS, they were a giant scam and a fraud. These TREASONIST AMERICAN politicians in our own U.S. GOVERNMENT who were behind this FOREIGN BACKED PONZI SCHEME and allowed this CRIME OF EPIC PROPORTIONS to be done to UNSUSPECTING, HOMEBUYERS should be thrown out on their heads, stripped of their pensions, tried and thrown into prison for TREASON and perping a GIANT PONZI SCHEME FRAUD HEIST ON THE AMERICAN PEOPLE. .

    • l vent says:

      They never securitized any of these fake mortgage loans either, the entire mortgage loan was an illusion, a sham and a fraud. There were never any mortgage loans to securitize. IT WAS ALL A GIANT SCAM. The missing notes and the ORIGINATION FRAUD CLEARLY PROVE THE WHOLE TRANSACTION NEVER REALLY OCCURRED. The FORECLOSURE FRAUD is the cover up for the ORIGINATION FRAUD. The MULTINATIONAL FOREIGN OWNED NYSE-EURONEXT CYBERSCAMMED EVERYONE UP ON WALL STREET WITH FAKE ALGARHYTHMS. They made it look like they were making wealth off ot something that NEVER EXISTED. This was not unlike what ENRON did, only alot more massive as it effected the entire global financial system after these same foreigners robbed trillions of dollars from all of us when they robbed all of us and intentionally crashed the stock market.. That does not even include the TAX-PAYER FUNDED bailouts or the 100 Trillion dollars in mortgage derivative wealth they created off of the FAKE MBS’s. CNBC reported these very crooks made 60 TRILLION IN 1999 ALONE OFF OF SO CALLED MORTGAGE DERIVATIVES. RESCIND OUR FAKE MORTGAGE LOANS. WE WERE ROBBED! FORCE THESE MULTINATIONAL FOREIGN NEW WORLD ORDER CROOKS TO PAY BACK ALL OF THE INVESTORS AND THE HOMEOWNERS THAT THEY INTENTIONALLY SWINDLED!!!!! AMERICA IS NOT BROKE!!!!

      • I believe for the most part, most people do not understand the force of the Multinational Goreign New World Oder…the crooks who are behind the scene. It is a deep crime…leading to a whole lot of ‘ sick humans ‘ going back many centuries….up to today. http://www.theforbiddenknowledge.com/hardtruth/committeof300.htm Much needs to be read..once one gets the idea where this all started and who is involved in the destruction of the world as we are seeing today. . all the laws/ rules were made by the ‘ secret society ‘ ….before and after…..take the time to read and learn why we are the ‘ victims ‘…and we cannot stand to sit back and just complain of the foreclosures. WE ARE THEIR PLANNED VICTIMS OF DESTRUCTION….IT GOES FURTHER THAN FORECLOSURES. . DOES JFK MURDER TILL YOU SOMETHING? WHAT HE BELIEVED IN? The secret society tells any leader who goes against them will be killed. This is why no government stands by the citizens. Jackie Kennedy did not come forth with the knowledge she knew….THAT IS WHY….it meant death. This is facts…it was and is history…something we were not taught or told. …There you have it…now read and learn why this all is happening….the trail of hatred and greed to have a world they own and controll….now you know why NO governments and/or courts will side with you…..and why they say the banksters own the governments…….

      • Sorry…that is the MULTINATIONAL FOREIGN NEW WORLD ORDER…..

      • l vent says:

        theforbiddenknowledge is a great website. have you checked this article out yet? This one really connected the dots for me: http://www.forbiddenknowledge.com/hardtruth/jesuit_world_control.htm

  11. Katheryn says:

    They have to justify their large salaries and pretend they are doing something worthwhile. Remember, they can be as studpid and dishonest as the want…who can stop them? I guess they are stating, inotherwords, they did not have to make sure you were qualified prior? Tax returns you had to provide and pay stubs were all just for no reason. How about FRAUD and being intentionally mislead? Oh, I forgot, not fraud…just wee little oversights. My Bad. I have to learn to use their verbiage.

    • Mary says:

      ‘I guess they are stating, inotherwords, they did not have to make sure you were qualified prior? ” Kathryn, that is exactly what I was thinking as I was reading this. I would think this document would be a great thing to have as evidence in court. Wow.

  12. JIm Bethea says:

    This is just a ploy to make the Federal Reserve System [a private Delaware chartered corporation] appear to legal while the main objective is to cover their axxs. Millions of slow learners are now realizing that the Fed Res is a European Cartel of Bankstersl who will steal every dollar from the American taxpayers, their kids & their grands to come. The wolves in lambs clothing…………WAKE UP AMERICA before it is called the NORTH AMERICAN UNION [as they plan for it to become]

    • Katheryn says:

      Jim – I don’t think they even care about covering the axxxs. I think everything they do, every law they break is blatant and in our faces and we need to find a way to get right up and personal in their faces. We have to get more creative and keep hammering away publically.

  13. Kevin says:

    When are we going to stop calling it a loan. We table fund this at closing with our signature. They loan us nothing! This is what needs to told!

    • Bobbi Swann says:

      Kevin – please explain a little more in detail….table funding coming from a warehouse line of credit?

    • l vent says:

      I know exactly what you mean Kevin, WE were the collateral that they used to SECURE THAT CREDIT. That is the ORIGINATION FRAUD, the entire loan never transpired, all they needed were humans to use as their credit card, There was never any real money to back up these loans, no ORIGINATION TO RECORD OR PUT ON TITLE BECA– USE NO ACTUAL LOAN EVER OCCURRED. It was all a GRAND ILLUSION. That is why they never securitized the shit, THERE WAS NEVER ANYTHING TO SECURITIZE, and there is no such thing as a MORTGAGE BACKED SECURITY. WE WERE THE ONLY THINGS BACKING THAT MORTGAGE. They set us up at that table to FAIL. That is why there is RAMPANT FRAUD THROUGH THE ENTIRE MORTGAGE LOAN. They also tried to cover up THE ORIGINATION FRAUD with MERS and FRAUDCLOSURES. Mere distractions from who the ORIGINATORS/PERPERTRATORS OF THE PONZI SCHEME HEIST REALLY WERE, FOREIGN OWNED FANNIE MAE AND FREDDIE MAC. THE PROOF IS IN THE ORIGINATION FRAUD AND THE MISSING ORIGINAL BLUE INK NOTES.THEY NEVER CASHED THE CHECK, THE NOTE. They bought and sold and gambled on THIN AIR.

      • l vent says:

        THE BOOKS WERE COOKED TO PERP THE PONZI SCHEME. THE SO-CALLED FAILED BANKS ARE HIDING IN NON-FDIC, UNSECURED TRUSTS.

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