July 14, 2008 in City

Fed set to protect home buyers better

 

The Federal Reserve is ready to give home buyers more protection from the types of shady lending practices that have contributed to the housing crisis.

Chairman Ben Bernanke and his central bank colleagues were expected to approve a plan today that would crack down on dubious lending practices that have hurt many “subprime” borrowers – people with tarnished credit histories or low incomes.

The proposed rules, made public in December, would:

•Restrict lenders from penalizing risky borrowers who pay loans off early.

•Require lenders to make sure those borrowers set aside money to pay for taxes and insurance.

•Bar lenders from making loans without proof of a borrower’s income.

•Prohibit lenders from engaging in a pattern or practice of lending without considering a borrower’s ability to repay a home loan from sources other than the home’s value.

•Curtail misleading ads for many types of mortgages.

•Bolster financial disclosures to borrowers.

SAN FRANCISCO

Yahoo rebuffs Icahn, Microsoft

After more than five months of sparring, the battle for control of Yahoo Inc. has turned into a bare-knuckles brawl with a whiff of desperation hanging over all the key combatants.

The showdown intensified late Saturday after Yahoo revealed that it had spurned Microsoft’s latest attempt to buy its online search engine in a joint proposal made with activist investor Carl Icahn, who is leading a shareholder rebellion aimed at removing Yahoo’s current board.

Icahn, who has no experience running an Internet company, would have been left in charge of Yahoo’s remaining pieces had an agreement to sell the search engine to Microsoft been reached.

“It’s not surprising that Yahoo would reject an offer like that,” Gartner Inc. analyst Andrew Frank said Sunday. “It would be just too complicated to do.”

Neither Microsoft nor Icahn responded to requests for comment Sunday.

From wire reports

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