Paulson: Time to toughen rules on mortgage brokers

Thursday March 13, 12:11 pm ET
By Glenn Somerville

WASHINGTON (Reuters) - Financial regulators pledged on Thursday to toughen rules for mortgage brokers, lenders and credit agencies in a bid to ease a credit crunch and to try to restore investor confidence in markets.

Treasury Secretary Henry Paulson, unveiling a 20-page set of recommendations from the top-level President's Working Group, blamed a "dramatic weakening" of underwriting standards for lower-quality home loans for helping trigger turmoil in credit markets that raged on unabated as he spoke.

Stock prices tumbled on rising fears of U.S. recession, gold prices soared and the dollar's value plumbed fresh record lows as investors shunned it in favor of the euro and other stronger currencies.