Bernanke: Fed Eyeing Mortgage Broker Pay

U.S. Federal Reserve Chairman Ben Bernanke said Friday that the Fed will consider whether consumers need more information on how mortgage brokers are paid as part of its efforts to improve transparency in the mortgage industry.

In a letter to Rep. Brad Miller, D-N.C., Bernanke wrote that the Fed is "committed to providing more effective and comprehensible disclosures to help consumers avoid loans that are not in their interest."

The letter, dated Friday, was released by Miller's office.

The Federal Reserve Board is scheduled to meet Tuesday to consider rules under the Home Ownership and Equity Protection Act, or HOEPA, which would address unfair mortgage lending practices.

"In formulating its proposal, the Board has looked closely at practices in the subprime mortgage market," Bernanke wrote, adding the Fed's proposals "will attempt to adequately protect consumers while maintaining responsible lending markets."

Bernanke added that the Fed will conduct "extensive consumer testing" to ensure better disclosures. "As we test consumer disclosures, we will also consider the need for improved disclosures concerning mortgage brokers and how they are compensated," Bernanke wrote.