Foreclosure Crisis may lead to Necessary Changes

With so many homes being lost all over the country, it is time there are some changed made in the real estate industry, especially regarding lending.

A few good things proposed that might become a reality in the future:

1. Lenders will require proof of income if the borrower's credit isn't good. Also money for taxes and insurance will need to be set aside.

2. Prepayment penalties are banned if the payment changes in the first four years. (I would like to see prepayment penalties go away completely. It is a ridiculous clause anyway.)

3. The borrower must be able to repay the home loan based on house's value alone. This one is a little confusing to me because it seems like this condition is already present, which is why we have appraisals. No one can guarantee the future value of a home, and it seems that's the desire here.

We seem to be moving in the right direction - just very, very slowly.