Treasury Secretary Henry Paulson, Federal Reserve Chairman Ben S. Bernanke and other U.S. regulators are expected to propose increased scrutiny of mortgage lending in a report on lessons learned from the mortgage crisis, according to a Bloomberg article. These plans are the results of a review by the President's Working Group on Financial Markets, which Paulson leads.
Paulson told The Wall Street Journal that the group's recommendations will specifically include increasing state and federal oversight of mortgage lenders and brokers. The group will also seek to put in place ‘strong nationwide licensing standards’ for mortgage brokers – a move that will likely require legislation.
In addition, bank supervisors would be asked to increase their examination of due-diligence, risk-management and risk-awareness policies at banks, and regulators will be required to collaborate with the Financial Accounting Standards Board to look at accounting issues, as well as be less reliant on credit-rating firms' evaluations of risk, the Wall Street Journal adds.