Mortgage lenders have taken a lot of the blame for the collapse of the housing market. They approved borrowers who couldn't pay back their mortgage loans. They pushed other homebuyers to take out risky mortgage loans that these borrowers didn't fully understand. This led to higher foreclosure rates when the mortgage interest rates on these risky loan products suddenly increased, and borrowers could no longer pay their monthly mortgage bills.

The government wants to make sure this doesn't happen again. Of course, when the government sets out to solve a problem, does that problem ever really get solved? Or do we just end up with another lumbering, inefficient and often ineffective bureaucracy?

According to an Associated Press report, the Federal Reserve yesterday approved a set of proposals that, the reserve says, will make it easier for U.S. residents with mortgages to understand how their loans work. That's the theory, at least. We'll see how it actually works in practice.

Basically, the Fed proposals require mortgage lenders to explain potentially risky mortgage products in plain English. Lenders who are recommending adjustable-rate mortgages must make sure to explain to borrowers exactly how their monthly mortgage bills might change once the loan adjusts.

Many lenders and banks view the Fed rules as just one more unneeded layer of red tape. Most mortgage lenders already do all this, without any government regulations hanging over their heads.

This is true. Unfortunately, during the busy days of the housing boom, a lot of mortgage lenders didn't explain things clearly to borrowers. Of course, borrowers have to take responsibility for their own actions. No one forced them to take out interest-only, adjustable-rate and other risky mortgages. And no one forced them to buy homes that they really couldn't afford.

But mortgage lenders were complicit in a lot of the bad decisions that homebuyers made. Will the Fed's new rules change this? I have to admit, I'm pessimistic. I'm used to government screwing things up, not making them better. (I live in Illinois, after all.)