Mortgages: Will Paulson’s Plan Fix the Mess?
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, mortgages, Paulson March 16th, 2008More-stringent lending standards are aimed at avoiding more problems, but analysts say banks have already implemented the needed changes
Many U.S. mortgage lenders and home builders have already been brought to their knees as contagion from the subprime meltdown has effectively closed down credit markets. The announcement of more stringent rules across the financial industry has some people wondering what the implications could be for mortgage lenders and home builders.
The recommendations put forth on Mar. 13 by Treasury Secretary Henry Paulson reflect the consensus of the Presidents Working Group on Financial Markets, comprised of the heads of the Federal Reserve Board, the New York Federal Reserve Bank, the Securities and Exchange Commission and other financial policymakers and regulators. The suggestions range from enforcing tougher lending standards to improving oversight by state and federal regulators to ensuring that banks hold ample capital to cover the risks they assume.
