The Associated Press
July 14, 2008 - 6:12 p.m.

(AP) - The Federal Reserve Monday adopted new rules to crack down on dubious home-lending practices.

Here's a run down of some of the provisions.

For riskiest "subprime" borrowers — those with poor credit or to a reduced state incomes — the rules will:

— bar lenders from making loans without proof of a borrower's income.

— require lenders to make sure risky borrowers set aside money to pay for taxes and insurance.

— restrict lenders from penalizing risky borrowers who pay loans off early. Such "prepayment" penalties are banned if the payment can modify during the initial four years of the mortgage. In other cases, a mulct be possible to't be imposed in the first sum of two units years of the mortgage.

— prohibit lenders from making a loan without considering a borrower's ability to repay a home loan from sources other than the home's value. The borrower need not have to substantiate that the lender engaged in a "pattern or practice" for this to be deemed a violation.

For every one of mortgages, the plan would require advertising to contain supplemental information about rates, monthly payments and other lend features, and it would curtail unquestioned deceptive or misleading advertising practices.

For case, lenders are barred from advertising "fixed" rates or payments without making irreproachable that the "fixed" rates last for only a limited time — not the life of the lend.