Feds Outline New, Tougher Credit Rules
Paulson pushes stricter standards for mortgage lenders
By Jim O'Neill,  Newser User
Posted Mar 13, 2008 6:51 AM CDT
Treasury Secretary Henry Paulson listens to opening remarks from members of Congress on Capitol Hill in Washington, Wednesday, March 5, 2008, prior to giving his assessment of efforts to heal the American...   (AP Photo/J. Scott Applewhite)
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(Newser) – A panel led by Treasury Secretary Henry Paulson is seeking a major overhaul of rules affecting mortgage lenders and a credit market decimated by risky subprime loans and loose oversight, the Wall Street Journal reports. Among panel recommendations to be released today:

  • Strengthen mortgage lender and broker oversight
  • Establish licensing standards for mortgage brokers

  • Require credit-rating firms to differentiate between complex-structured products and conventional bonds
  • Require issuers of mortgage-backed securities to reveal "the level and scope of due diligence" and the underlying assets of the securities
  • Require disclosure of whether "issuers have shopped for ratings"
  • Urge global bank regulators to require banks hold sufficient capital to cover risky investments
  • Update standards for how banks manage liquidity