The Federal Reserve will issue new rules next week aimed at protecting future homebuyers from dubious lending practices, its most sweeping response to a housing crisis that has propelled foreclosures to record highs.

Fed Chairman Ben Bernanke spoke of the much-awaited rules in a broader speech Tuesday about the challenges confronting policymakers in trying to stabilize a shaky U.S. financial system. To that end, Bernanke said the Fed may give squeezed Wall Street firms more time to tap the central bank’s emergency loan program.

To prevent a repeat of the current mortgage mess, Bernanke said the Fed will adopt rules cracking down on a range of shady lending practices that has burned many of the nation’s riskiest “subprime” borrowers — those with spotty credit or low incomes — who were hardest hit by the housing and credit debacles.

The plan, which will be voted on at a Fed board meeting Monday, would apply to new loans made by thousands of lenders of all types, including banks and brokers.

This entry was posted on Wednesday, July 9th, 2008 at 9:52 pm and is filed under Real Estate. Tags: Ben Bernanke central bank Federal Reserve System United States Wall Street . You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.