The Federal Reserve gave consumer a few months to mull over this proposition: Should credit card companies be allowed to raise the rate on debt you already owe? Is it fair for them to constantly reshuffle your debt so you are always paying the highest possible interest rate and the most fees? Should banks keep secret the way to opt out of their overdraft protection plans, where they can charge a huge fee for a tiny overdraft? And can they send you an offer of one rate, then switch you to another?

Guess what? Consumers overwhelmingly hate all these current practices. They think credit card companies should be reigned in. Nearly 20,000 people wrote in on the three parts of the proposal: credit cards, overdrafts and truth in lending rules. Many call for stricter rules and use florid language like "usury."

Also guess what? Banks think the rules are a stupid idea. Bank of America is not just worried about itself, of course. BofA is concerned about the "broad impact on the economy both at the retail level and in highly complex securitization markets, slowing growth and limiting access to financing. To quote Bill Murray: "Dog and cats, living together!"

BusinessWeek's Jessica Silver-Greenberg says that it's the most significant credit card rule change in 20 years. Till now, she writes, regulators were content to simply force banks to clearly disclose their terms (which resulted in those pages of small-type that practically nobody reads). So now regulators and getting around to actually regulating. The comment period ended August 4, (though the comment form is still up).

Mortgage expert David Reed invites Walletpop readers to ask him questions about real estate financing. leave your questions in the comment section of this post.

Rates over the past few months have been volatile, to say the least. I recall one day where mortgage rates on a 30-year fixed rate loan went up nearly 1/2% in one day. That's a rare occurrence, but not unheard of. Rates can move throughout the day based upon a variety of economic or political factors but the fact that they do move requires a portion of prudence when it comes to qualifying.

Realtors, lenders, even your beer buddies acknowledge the importance of getting pre-approved by a lender before you go shopping for a home. When you do so you can shop in confidence. That is unless you were pushing debt ratios to begin with while mortgage rates hovered near 5 1/2%, like they did last March. Now, rates are closer to 6% and if you got pre-approved for a home loan a couple of months ago and are still shopping you might want to contact your lender and make sure you can still qualify.

This is especially true for those who might have been pre-approved for a mortgage to buy a brand new house but the builder isn't finished with your new abode. A lot can happen over several weeks, shoot, a lot can happen in the course of a business day. If you're pre-approved, it pays to contact your lender to find out how high rates can go and still keep your pre-approval. If you make an offer on a house and rates have gone up, you might be in for a sad surprise.

Real estate finance expert David Reed is president of CD REED Mortgage Bankers in Austin, TX and author of Mortgage Confidential: What You Need to Know That Your Lender Won't Tell You and Mortgages 101: Quick Answers to over 250 Critical Questions About Your Home Loan.

Mortgage expert David Reed invites Walletpop readers to ask him questions about real estate financing. leave your questions in the comment section of this post.

Q: David -- I've been asked by Freepoint to refinance with them. This company claims that I would build up wealth by investing the difference in my equity with them, getting an interest only loan. They state that having equity in your home is not good because someone can sue you and have a claim on your equity. After several years, one would have enough money to pay off their mortgage if they desired. I would like to get advice on this. They said the higher interest would be a tax write off and I would be investing the equity and getting a higher return. Please advise. Thank you. - Helen

A: Helen -- Don't return their phone calls. I don't know who that company is, and while I'm sure they're a fine organization, I'm not comfortable. I see three big problems with this "pitch" which used to be very popular among mortgage loan officers yet seems to be falling by the wayside.

1. Build wealth by investing the different in equity with them
2. Having equity in your home isn't good because someone can sue you
3. The higher interest would be a tax write off

Sheesh. And I thought loan officers like that were out of business or selling cars or something.

Mortgage expert David Reed invites Walletpop readers to ask him questions about real estate financing. leave your questions in the comment section of this post.

Q: What are your thoughts on the feds likelihood of dropping the interests rates again. I'd like to buy a home during this period of lower home prices, and relatively low interest rates. Trying to judge the housing market and interest rates to get them at there best levels is tricky. When do you think it will be the best time to jump in to get the most for my money. Thanks in advance, Steve

A: Steve- Fixed mortgage rates anticipate Fed moves and don't react to them. When the Fed makes a cut, mortgage rates view that move as an indicator of the future of the economy. When the Fed slashed the Fed Funds rate over a series of cuts, mortgage lenders saw that the Fed interpreted our economy as in dire, dire straits. Rates moved downward as a result. Wall Street is in general agreement that the next Fed cut will be a less draconian 1/4%.

Mortgage expert David Reed invites Walletpop readers to ask him questions about real estate financing. leave your questions in the comment section of this post.

Q: The Fed has reduced rates by three full percentage points since last September. I have been following long term mortgage rates for quite some time. 15 and 30 year fixed rate mortgages are only .25% lower than they were last September. No one I ask seems to know why mortgage rates are still so high and happen to be rising as I write this. The current yield on the 10 year bond is 3.83, up from 3.47 early last week. My question is this. Do you think we will see lower mortgage rates in the future? - Carl

A: Carl -- good question. No, I really don't see lower rates in the future, certainly not anything like three percentage points. If 30-year and 15-year fixed rates do fall they might go down another 1/4 to 1/2% but nothing near to what the Fed has done with the Fed Funds Rate.

The fact is that the Fed has very little to do with fixed mortgage rates. Surprised?

Nobody knows where interest rates are headed. Nobody. No one knows about tomorrow or next week and certainly not for the next 30 days. If someone does tell you that they know where rates are headed you need simply do nothing more than politely nod your head as they gibber. But there is a fail-safe strategy that works every time.

Remember that mortgage rate quotes are absolutely no good until you, the borrower, instruct your loan officer or lender that you want to "lock in" or otherwise guarantee your interest rate for as long as it takes to close your deal. Rates can go up or they can go down over the course of a week. Heck, they can even change throughout the course of a day. Especially so with all the stock and bond market volatility we've witnessed over the past few months. So, do you lock or not lock? That's the question.

With Ben Bernanke slashing interest rates in an effort to kick-start a slowing economy/housing market, it's worth looking at the victims of this policy -- even as the stock market cheers each rate cut.

The people who are getting screwed royally here are the retirees living off of fixed-income investments: it's a lot harder to get by when CDs are paying 2% than when they're paying 4%+, as they were not so long ago.

Let me sum it up this way: these interest rates cuts are helping out people who racked up debt and slashing the living standards of people who saved responsibly for years and counted on their savings to provide for them in retirement. That's wrong.

Financial guru Jim Rogers recently told Bloomberg that "Bernanke loves printing money. This man is a nut. The dollar is collapsing, commodities are going through the roof, which means inflation's going through the roof. These people are leading us to terrible problems down the line.''

Retirees on fixed incomes would probably be inclined to agree. The moral of the story here is that if you rack up credit card debt and buy a house you can't afford, the Fed will help you. If you save dutifully like your parents taught you too, you're on your own.

With the Federal Reserve aggressively cutting interest rates, you may be wondering if it's time to refinance your current mortgage. The answer is a simple yes. Back in January I locked in a 4.5% 15-year fixed rate mortgage the day after the Fed rate cut. Rates went back up to 5.5% within a week.

Generally you will benefit from a refinance as long as your interest rate will go down by at least 1% and the new loan does not require you to pay points in order to get that lowered rate. In most cases, a refinance is only worth it if you plan to stay in the home for more than three years. If you think you'll be selling the home before that, the costs of a refinance probably won't be recovered unless you can lower your rate by 2% or more.

With interest rates so low, the only kind of mortgage you should consider today is a traditional fixed-rate mortgage. Lock in those low rates. Don't play games with variable rates. If you can't afford the payment on a 30-year fixed-rate, consider a 40- or 50-year mortgage rather than a variable rate mortgage. You can always make extra principal payments when you can afford them to shorten the life of the loan in the future. But, of course, be sure your loan doesn't have any pre-payment penalties. Never accept a mortgage loan with pre-payment penalties. Ask that question when you're shopping for a loan and ask it again before you sign the papers to close the loan. Make sure you see in writing that there are no pre-payment penalties before you close the loan.

Check your credit report and score. Before applying for any new major loan it's a good idea to check your credit report and credit score. If you find any erroneous information on your credit report, clean it up before you start the application process. Cleaning things up as part of the underwriting process will only delay the loan process and could even kill the loan. To get the best rates, your credit score must be 730 or higher. People with this credit score can often get rates below the national average rate you'll see quoted around the Internet. If your score is below 675, you will pay significantly higher rates than you are seeing quoted. People with scores between 620 and 674 generally pay 1.5% to 1.9% higher rates for a mortgage. People with scores between 560 and 619 will find their rates are about 3.8% higher than the national average, if they can find a lender at all in today's tight mortgage market. Below that you'll probably find it almost impossible to get a refinance in today's market. You can use the round robin debt startegy to improve your score quickly.

Ken and Daria Dolan, America's First Family of Personal Finance, answer your questions every Friday.

Ken and Daria,

I'm transferring my credit card debt to cards with a 0% introductory interest rate. There are a few fees involved, but I figure I'm saving more on the interest charges. Is this a smart idea?

Jeff

Great question, Jeff (and you might be surprised at our answer). The credit questions are really pouring in, so be sure to check back as we will be answering many more of them in coming weeks. Click on the video below for this week's answer!

Ken and Daria Dolan offer expert advice on debt management and living credit smart at Dolans.com.

Click here to ask Ken and Daria your question.

Back in the day, you got a credit card with a certain interest rate, and unless you failed to pay your bill on time, that was that. There was sometimes a clause in your credit card agreement that gave the credit card company the right to adjust your rate at certain intervals. But that was often negotiable, and the people who most often had their rates changed were those who failed to pay their bills on time.

Over the years, the credit card agreements became more restrictive. The companies say this is because bad credit card holders were costing them money, and they were only recovering those costs with higher rates and fees.