Nov. 8 (Bloomberg) -- U.S. Senator Charles Schumer urged Federal Reserve Chairman Ben S. Bernanke to heed turmoil in credit markets as ``a call to action'' and confront the surge in mortgage foreclosures to head off an economic crisis.

A ``laissez-faire, hands-off attitude'' is an inappropriate response to threats facing the U.S. economy, which also include a drop in the value of the dollar and record-high oil prices, Schumer told Bernanke today during the Fed chief's appearance before the congressional Joint Economic Committee in Washington.

``I'm very concerned, Mr. Chairman, that none of the regulators are acting quickly or boldly enough to deal with the risks,'' said Schumer, the New York Democrat who heads the panel.

Congress has repeatedly criticized the Fed this year for failing to protect consumers from lending practices that have fueled soaring delinquency and foreclosure rates among subprime- mortgage borrowers. Bernanke said today the agency is ``on schedule'' to propose rules addressing unfair or deceptive mortgage lending practices ``by the end of this year.''

Schumer said the Bush administration's policy responses to the subprime mortgage meltdown ``have not come close to matching the magnitude of the crisis.'' He urged Bernanke to use his position to ``jawbone them into action.''

Rising Delinquencies

Delinquencies on adjustable-rate subprime mortgages are likely to grow in the coming quarters as their interest rates increase, Bernanke said. He said the Fed is taking steps to limit foreclosures, including encouraging mortgage lenders and servicers to modify loans and offer repayment plans.

Bernanke reiterated Fed Governor Randall Kroszner's Nov. 5 comments that the central bank wants lenders to develop a systematic approach to modify mortgages rather than doing it on a case-by-case basis.

``We do support scaling up these efforts,'' Bernanke said.

He said the Fed will soon propose rules to curb abuses in mortgage advertising and ensure borrowers receive timely disclosures.

Schumer introduced legislation today that would require lenders to offer prospective borrowers a one-page disclosure form with a plain-English explanation of loan terms, including prepayment penalties and dates the interest rate will increase.

In May, he introduced a bill that would require mortgage brokers to assess borrowers' ability to repay, and hold lenders accountable for their brokers and appraisers. In September, the Senate approved his plan to give $100 million to nonprofit groups for programs to keep delinquent borrowers in their homes.

U.S. home foreclosures doubled in the third quarter from a year earlier, according to a Nov. 1 report by RealtyTrac. There were 635,159 foreclosure filings in the quarter, the Irvine, California-based research company said.

To contact the reporter on this story: Alison Vekshin in Washington at avekshin@bloomberg.net.

Last Updated: November 8, 2007 14:30 EST