Bernanke to the Rescue for Homebuyers of the Future?

Dubious lending practices and borrowers less-than-educated in the realities facing them under certain borrowing terms could be a thing of the past. At least if Ben Bernanke has his way. Next week the Fed will be issuing new rules that seek to protect homebuyers from the disastrous borrowing and lending practices that have created the housing and financial market mess we’re in the middle of today.

The new rules, which are aimed at the riskier side of the biz (think subprime borrowers), applies to new loans made by lenders of all shapes and forms, such as banks, brokers, etc.

Gone will be the days of stated income (sorry, folks, you’ll actually have to show that you make what you make), the days of lenders abusing every single risky borrower who pays off their loan early, and will require lenders to ensure borrowers are setting aside money to pay for taxes and insurance (sounds almost like a babysitting job to me, but obviously some people need babysitting).

Not sure what to think here–it’s good, it’s bad, it’s a little of both. On the one hand, you have to think that if people have the initiative to go and get a loan to buy a house, they’d have the initiative to gather their thoughts and do the right (read intelligent and responsible) thing too. But on the other hand, you have the lenders going to the well because it’s legal–even if it will, in the end, ruin the borrower in the short term and, as has proven itself pretty clearly, the lender in the long run.

C’est la vie, I guess.