by Tanta on 7/14/2008 01:59:00 PM

I would be remiss if in the excitement today of the banking system apparently going to hell in a handbasket, I neglected to take notice of this:

July 14 (Bloomberg) -- The Federal Reserve tightened its mortgage rules by requiring lenders to determine a borrower's ability to repay and barring other practices that led to the collapse of the U.S. housing market.

The Fed Board of Governors voted in Washington today to require that lenders verify a homebuyer's income or assets, and create an escrow account for property taxes and homeowners' insurance. The rules curb penalties for repaying a loan early.

Just because they've waited until the children's 21st birthday to finally ground them doesn't mean they're not responsible parents.

They also left alone the practice of broker "yield spread premiums":

Bernanke questioned a staff recommendation not to ban a practice that lets lenders pay brokers based on the interest rates they charge a consumer, which he said sets an incentive for brokers to steer people into more expensive loans.

"Staff considered a rule that would ban that type of payment, but we ran into some serious, practical problems," Ryan said. She said it would be difficult to distinguish between the practice and legitimate payments to brokers.

Heaven forbid the regulators should have to make "difficult" distinctions. Far better to let consumers try to tell the difference, I guess.