The Federal Reserve just announced new proposed mortgage rules aimed at cutting down on shady lending practices.
As far as I can tell, this is one of the most absurdly cosmetic measures ever undertaken, and I include the bizarre decision to split banking and underwriting in the wake of the 1929 stock market crash. The rules seem to be mostly aimed at curtailing abuses such as excessive prepayment penalties, which to a first approximation is a problem for exactly no one in the current mortgage market. Even the mighty reporters in the the Wall Street Journal's newsroom couldn't really find anyone to say that this was going to, y'know, actually affect anything.
I can't really find much to object to in the new rules (though, of course, I am not a mortgage banker.) But the proposal was greeted with much fanfar, simply because the headline has the words "mortgage" and "Federal Reserve" in it. Presumably this is what the Fed was aiming for: a bid to calm the markets without actually enacting any regulations that could have nasty side effects. And at that, as a strategy it sure beats "time to get in there and change everything!"
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