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Monday, November 07, 2005

New mortgage data has not led the Federal Reserve to define clear boundaries between legitimate home loans to riskier customers and.....

WASHINGTON, Nov 7 (Reuters) - New mortgage data has not led the Federal Reserve to define clear boundaries between legitimate home loans to riskier customers and loans aimed at cheating borrowers, Fed Gov. Mark Olson said on Monday.

"Rather than draw bright lines around what might be considered predatory lending and possibly returning to a situation in which potentially credit-worthy borrowers do not have access to credit, the Federal Reserve has used disclosure of loan-pricing data to monitor the market and take enforcement action where necessary," he said in remarks prepared for delivery to the Consumer Bankers' Association.

Olson did not make remarks about the state of the U.S. economy in his speech.

New Home Mortgage Disclosure Act (HMDA) information on high-priced loans does not explain why minorities tended to pay more for loans and/or be denied access to credit more frequently, Olson said. But the data will help regulators focus on which lenders and markets deserve more scrutiny, he said.

"The new disclosure requirements will ensure that, as the marketplace develops and changes, interested parties will be able to conduct more efficient fair lending reviews," he added.

Olson said negotiating a home loan is complicated even for a financially experienced customer.

"As a former banker who has been involved in dozens of mortgage loan closings over the years, I never walked into a closing of a mortgage loan on my own residence feeling confident that I knew everything that I should know about my loan and mortgage terms," he said. More>>>

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