Known as "Wall Street Reform" the new Restoring American Financial Stability (RAFS) Act of 2010, in part, eliminates many of the questionable mortgage lending practices that helped spark the financial meltdown.

President Obama signed the landmark consumer protection legislation earlier this year to, among other efforts, create a new Federal Reserve-based watchdog, the Consumer Financial Protection Agency.

The agency is designed to ensure consumers get clear, accurate information necessary to shop for mortgages, credit cards and other financial products. It also protects consumers from hidden fees, predatory terms and deception in a host of transactions.

In September, Obama appointed populist Elizabeth Warren as his assistant to implement the new law and as Special Advisor to the Secretary of the Treasury to help roll out the agency.

In the wake of the worst recession to hit the nation since the Great Depression, Warren previously served as chair of a Congressional oversight panel created to investigate the U.S. banking bailout (formally known as the Troubled Assets Relief Program or TARP).

She has long advocated the creation of a new Consumer Finance Protection Agency.

"The Dodd-Frank Act (RAFS Act is also known as the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010) addresses critical gaps and weaknesses of the U.S. regulatory framework, many of which were revealed by the crisis," said Federal Reserve Chairman Ben S. Bernanke during a regulatory reform implementation hearing before the U.S. Senate's, Committee on Banking, Housing, and Urban Affairs.

"The Federal Reserve is committed to working with the other financial regulatory agencies to effectively implement and execute the act, while also developing complementary improvements to the financial regulatory framework," Bernanke testified.

John Tripp, a real estate agent and mortgage broker with Foundation Trust Mortgage Securities in San Jose said the new law is so far reaching it could take from one to three years before all the provisions are fully implemented.

However, much regulatory reform for the mortgage industry is already underway, but the Federal Reserve is charged with completing more than 50 RAFS Act rulemakings amid some 250 projects necessary to fully implement the new law.

The so-called "Wall Street Reform" is laden with plenty of provisions for people who live on Main Street.

"Frankly, I don't know how consumers got by without these laws in place up until now and it's beyond me as to why the laws and guidelines were so loosely structured up until now," said Julie Larsen Wyss, a broker associate with Intero Real Estate Services in San Jose.

Planned are a national consumer complaint hotline so consumers will have, for the first time, a single, toll-free number to report problems with financial products and services; a new Office of Financial Literacy, and a new U.S. Department of Housing and Urban Development (HUD) Office of Housing Counseling to boost homeownership and rental housing counseling.

"For the consumer there will be more emphasis on counseling and education in financial transactions for obtaining credit, using credit and changed circumstances, like unemployment, financial hardship, etc.," said Tripp, also a past president of the Silicon Valley Association of Realtors.

"Good or bad, it will be harder for marginal financial qualified consumers to obtain credit or a loan," Tripp added.

The new law governs banks and credit unions with assets of over $10 billion and all mortgage-related businesses (lenders, servicers, mortgage brokers, and foreclosure scam operators), payday lenders, and student lenders as well as other non-bank financial companies, including debt collectors and consumer reporting agencies.

Banks and credit unions with assets of $10 billion or less will be examined for consumer complaints by the appropriate regulator.

"On this, all I can say is that the testing and knowledge guidelines (for mortgage lenders, banks and other financial institutions) are brutal. We are required to know details from underwriting to appraisals and everything in-between," said Wyss, also a broker associate at North Star Mortgage in San Jose.

She added, "Only the dedicated mortgage originators will be in the business by the end of this year.....as it should be."

Among its provisions, the RAFS Act includes help for homeowners and home buyers, including:

-- Prohibiting unfair lending. RAFS prohibits "yield spread premiums" and other financial incentives that encourage lenders to steer borrowers to more costly loans and pre-payment penalties that trapped so many borrowers in unaffordable loans.

-- Establishing penalties for irresponsible lending. Lenders and mortgage brokers who don't comply with new standards will be held accountable by consumers for as much as three-years of interest payments and damages plus attorney's fees. The law also protects borrowers against foreclosure for violations of these standards.

-- Expanding consumer protections for high-cost mortgages. The new law expands the protections available under federal rules on high-cost loans by lowering the interest rate and the points and fee triggers that define high cost loans. Also, lenders must disclose the maximum a consumer could pay on a variable rate mortgage, with a warning that payments will vary based on interest rate changes.

-- Requiring lenders to ensure borrowers' ability to repay. The act establishes a simple federal standard for all home loans: institutions must ensure that borrowers can repay the loans they are sold.

-- Requiring additional mortgage disclosures. Lenders must disclose the maximum a consumer could pay on a variable rate mortgage, with a warning that payments will vary based on interest rate changes.

-- Emergency mortgage relief. Based on a successful Pennsylvania program, the new law provides $1 billion for bridge loans to qualified unemployed homeowners with reasonable prospects for reemployment to help cover mortgage payments until they are reemployed.

-- Foreclosure legal assistance. The law authorizes a HUD-administered program for making grants to provide foreclosure legal assistance to low- and moderate-income homeowners and tenants related to homeownership preservation, home foreclosure prevention, and tenancy associated with home foreclosure.

-- Free credit scores. Consumers will get free access to their credit score if their score negatively affects them in a financial transaction or a hiring decision. Credit scores are highly considered in mortgage applications.

"This is all a reminder of who we are as mortgage professionals, the rules that we must abide by, and how we are to manage our consumer's needs and wants," said Richard K. Miller, regional sales manager for Proficio Mortgage Ventures in Milpitas.

Miller says, given the scope of the new law, the mortgage industry will have to hunker down and learn the new ropes, but once all provisions are in place it should prevent another housing crisis from bringing down the economy.

"We, as the originators, spend enormous amount of time in selling, but we tend to spend little time explaining. These changes and more will affect our business but, in the future, there will be continued stability in the industry for the future leaders in our industry, as well as opportunity of homeownership for our consumers and clients," Miller said.