Borrowers Favor Options And Access; Survey reveals opposition to Home Loan Protection Act.

Business Editors/Political Writers

ALBUQUERQUE, N.M.--(BUSINESS WIRE)--Feb. 2, 2004

A recently conducted poll aimed at assessing New Mexicans' attitudes towards the issue of abusive lending and the New Mexico Home Loan Protection Act revealed a very low public awareness of the issue and law. However, when presented with unbiased facts about the law, a majority of respondents opposed key aspects of it.

Taken as a whole, survey results demonstrate that residents statewide do not support many provisions and potential consequences of the Home Loan Protection Act:

-- Two-thirds oppose the legislation if it means people with less

than perfect credit were no longer able to get a new home loan

because is would be too risky for mortgage lenders.

-- 72 percent believe it is more important for everyone to have

access to different loan options that it is for the government

to protect certain segments of the population from abusive

lending practices.

-- 82 percent of all those surveyed felt that lending companies

should be able to provide a wide variety of different home

loan options so that most people are able to get a home loan.

-- 83 percent of all those surveyed rated having the option of

choosing a lender who has the flexibility of creating a loan

package that best suits the individual's needs as very

important or important.

-- 79 percent of all those surveyed rated having the option of

choosing between many different lenders very important or

important.

-- 66 percent would oppose new legislation if it meant that

people with less than perfect credit were no longer able to

get home loans because of the risk to mortgage lenders.

Those surveyed do want continued government protections against abusive lending and enforcement of existing laws, as long as financing options are still available and the cost of obtaining a loan isn't increased.

"We have said all along that the Act bears most of the hallmarks of the worst pieces of mortgage lending legislation seen in other states, legislation that, in many cases, has been so flawed that it required significant revision within months of passage." said Phil Hitz, president of the New Mexico Financial Services Association. "It has become increasingly apparent that the only really effective way to combat abusive lending practices is through financial literacy education and enforcement of existing statutes. If the state legislature really wants to protect consumers from unscrupulous lenders, it would aggressively promote financial literacy for adults and high school children. In fact our survey shows that the poor education system rated the number one concern of New Mexicans."

Since the Act was passed on January 1, 2004, many mortgage lenders have stopped offering certain loans to avoid unintentionally breaking the law, and rating agencies such as Fitch have stopped rating New Mexico loans as well. In addition to drying up access to credit, the Act is expected to impact the state economy, diminishing jobs for those involved in the mortgage industry and the construction sector. A similar law in North Carolina reduced non-prime lending by nearly 20% and affected mostly high risk borrowers.

The New Mexico Financial Services Association (www.newmexicoafsa.org) is a trade association representing regional and national firms that provide a broad range of financial services including home purchase and home equity loans.

The poll was conducted in November and December 2003 by the Albuquerque-based firm Research and Polling, Inc. and surveyed 600 individuals statewide. The margin of error was plus or minus 4 points.

SOURCE: New Mexico Financial Services Association