Austin realtors respond to the mortgage crisis

AUSTIN, Texas (KXAN) -- The FDIC says as many as 10,000 customers could lose as much as $500 million.

Monday the Federal Reserve is expected to approve new rules to prevent any recurrence of the current Mortgage Mess.

The Treasury department is trying to calm fears about Fannie Mae and Freddie Mac.

Together they guarantee almost half of the nations $12 trillion of mortgage debt.

The government stepped in Friday to rescue Indymac Bancorp, something that people in downtown Austin have mixed feelings about.

Richard Gelfant told KXAN, "Supossedly they did it so the rest of the mortgage industry wouldn't suffer and we'd be able to maintain our economic standing in the world."

Meanwhile Susan Sandfer said, "I don't think the government can afford to bail everybody out we are stretched thin as it is."

Monday the Federal Reserve is expected to approve new set rules which would do four key things: Require lenders to verify income and assets.

Prohibit them from engaging in a "pattern or practice" of making loans borrowers can't afford.

It would also Limit prepayment penalties and require lenders to establish escrow accounts for taxes and insurance.

Those we talked to say the rules are long overdue.

Sandfer explains, "there's a lot of people that are out there first time home buyers that are desperate to buy homes and they take those ads seriously and they get involved in things that they can't afford so I think it is good."

The CEO of Principle Mortgage Group an Austin area Mortgage bank agrees, saying the new rules may make it a little more difficult to get a loan but will be better for the economy. Buddy Estrella says, "although it made it convenient for the borrower we can all see the mess that we are in as a result of that.

Estrella adds, he thinks this will be an interesting week on wall street.

"I think what we will see is the market will calm down because the government will buy stock from Fannie Mae and Freddie Mac that alone will calm the market down."