Mortgage Foreclosure & Refinance Resource

Today nation’s top economic policymakers, hoping to prevent a further mortgage bust, proposed a broad series of reforms aimed at tightening oversight of financial institutions.

The changes include

• Tougher disclosure requirements for banks and Wall Street firms
• A nationwide licensing system for mortgage brokers
• New rules for credit rating agencies

“This effort is not about finding excuses or scapegoats,” said Treasury Secretary Henry M. Paulson Jr., who outlined the proposals in a speech here on Thursday morning. “But poor judgment and poor market practices led to mistakes by all participants.”

The recommendations were developed by the President’s Working Group on Financial Markets, a group that includes the Treasury Secretary, the chairman of the Federal Reserve and the government’s top financial regulators.

Echoing measures that Congressional Democrats have been drafting, the presidential group called for tougher state and federal regulation of mortgage lenders and a nationwide set of licensing and registration standards for mortgage brokers.

That reflects a widespread criticism by many experts and policymakers, who have argued that millions of mortgages were originated by independent mortgage brokers who often had no concern about credit quality because they simply passed the mortgages to finance companies that in turn resold them to Wall Street firms and ultimately investors around the world.

Mr. Paulson offered few details on how the rules might work and some of his recommendations amounted to little more than demands that investors and financial institutions take greater care in analyzing and managing their risks,Senator Charles E. Schumer, the New York Democrat who is a member of the Banking, Housing and Urban Affairs and Finance committees, was both positive and critical about the proposals, saying in a statement: “The administration is finally moving towards where Congress was last year. The good news is, they’re beginning to put their toe in the water when it comes to government involvement to help the economy.