The Fed Finally Takes the First Step toward Recovery By Admitting the Problem

From tomorrow's NY Times:

The Federal Reserve, acknowledging that home mortgage lenders aggressively sold deceptive loans to borrowers who had little chance of repaying them, proposed a broad set of restrictions Tuesday on exotic mortgages and high-cost loans for people with weak credit.

Hallelujah! The authoritative and legitimate voice in the world of finance finally acknowledges corporate deception in the mortgage market and is proposing to regulate such deception out of the market in the future.

The Fed's proposals will undergo 3 months of public feedback before becoming law. This is a baby step compared to what needs to be done and maybe Congress will move regulatory measure along to govern the market at a steeper angle, but hopefully the Fed's fessing up will release the last brake on housing market reform.