In 2001, the Board banned several practices for high-cost loans, such as loan flipping – a practice characterized by frequent and repeated refinancing to generate fees for lenders. We will consider whether other specific lending practices are unfair or deceptive and should thus be prohibited under HOEPA. Next week we are holding a public hearing to gather input about potential abuses in mortgage lending.
In terms of macroeconomic measures to address the situation, the Federal Reserve has been aggressively lowering its policy interest rate, and the U.S. government has decided on a fiscal package to stimulate the economy, including a tax reduction.