Do you have faith that the government can protect you and other borrowers from bad mortgage loans pushed by shady mortgage lenders? If you answered "yes" to this question, you'll be happy to know that the Obama administration is pushing for the creation of a new consumer agency designed to oversee the mortgage-lending process.

If you answered "no" to the question? Then you're probably less than thrilled wtih this news.

According to a story in the Wall Street Journal, the proposed new consumer protection agency would have the powr to overhaul U.S. mortgage-lending practices. The agency's reach would supersede all current federal rules that are already designed to protect home buyers. (Of course, these rules haven't done much to stall the still-growing wave of housing foreclosures sweeping the nation.)

Under the administration's proposal, the new agency would require mortgage lenders to offer loans with simple terms alongside more complex mortgage products. Borrowers would have to opt out of the plain mortgages if they wanted to go wtih the more complicated mortgage loan products, according to the Journal story.

The new agency might also place more duties on mortgage brokers. For instance, brokers might be required to present homeowners with the best mortgage loans available to them. They might also have to make sure that their customers can afford the mortgages.

The new consumer agency might even forbid some lending practices such as pre-payment fees - passed onto consumers who have the audacity to pay off their mortgage loans early.

To no one's surprise, the banking industry is not pleased with the plan. They say such new rules could force banks out of business.

Of course, banks and other mortgage lenders have no one to blame but themselves for the increased attention of the federal government. They gave loans to people who couldn't afford the monthly mortgage payments. You can't do that and escape the consequences.