The heads of the Troubled Asset Relief Program and Federal Deposit Insurance Corporation are warning the U.S. needs to revamp its lending standards.

Last month, the Treasury Department revised its $75 billion mortgage assistance program in hopes of making it easier for struggling homeowners to avoid foreclosure. But a government watchdog group now says the changes may make the program more vulnerable to fraud.

"Criminals feed on borrower confusion, and frequent changes to the programs provide opportunities for experienced criminal elements to prey on desperate homeowners," inspector general for the Troubled Asset Relief Program, or TARP, Neil Barofsky wrote in a quarterly report issued Tuesday.

Also, Sheila Bair, chairwoman of the Federal Deposit Insurance Corporation, or FDIC, said the U.S. needs better lending standards to avoid a repeat of the 2008 financial crisis.

"Those were great days in banking. I hope that when we come out of this crisis we reacquaint ourselves with those values," Bair said.

Bair said banks must require more evidence a borrower is ready for homeownership and can repay the debt.

"I do worry that we really don't have these protections in place. I worry the party will get started again if we don't have these changes in place," she said.