MBA calls anti-abusive lending bill a good first step.
"This bill is a solid step toward achieving the twin goals of protecting consumers from fraud and enhancing homeownership opportunities--objectives shared by those on both sides of the debate," said Kurt Pfotenhauer, MBA's senior vice president, government affairs. "MBA condemns abusive lending practices, and we believe that a national uniform standard is critical to protecting consumers and ensuring an efficient marketplace."
MBA has commended the well-meaning attempts to fight predatory lending in communities across the country in recent years. However, it believes the proliferation of state and local law on this issue has resulted in a bewildering regulatory landscape that is both difficult and costly to decipher. Consumers bear the brunt of the situation, with fewer credit options and more expensive mortgages.
The Responsible Lending Act was introduced in the House of Representatives in March by Reps. Robert W. Ney (R-Ohio), chairman of the Subcommittee on Housing and Community Opportunity, and Paul E. Kanjorski (D-Pennsylvania), the ranking Democrat on the House Financial Services Capital Markets Subcommittee. The legislation has been referred to the Committee on Financial Services, where hearings are expected some time this year.
"We intend to look very carefully at this bill, and look forward to full congressional consideration of the details," Pfotenhauer said. "This appears to be a challenging bill for the mortgage industry to live up to, but it is a welcome addition to the discussion, particularly because of the open, deliberative and bipartisan discussions between Congressman Ney and Congressman Kanjorski that led to the bill's introduction. MBA appreciates their hard work and looks forward to working with them in the near future to perfect the bill."
The National Home Equity Mortgage Association (NHEMA), Washington, D.C., applauded the efforts of Reps. Ney and Kanjorski in introducing the bill. NHEMA, which represents nonprime mortgage lenders, issued a statement from its chairman, Mitch Feinstein, who said: "[O]ur initial review seems to indicate that the Responsible Lending Act would establish tough, balanced new national standards protecting mortgage borrowers across the country from abusive lending practices. At the same time, the bill seems to avoid the kinds of provisions included in some state laws that have made it more difficult for qualified consumers to obtain a mortgage."
The Bond Market Association, New York, and the American Securitization Forum (ASF) New York, also commended Ney and Kanjorski for introducing the Responsible Lending Act.
"Predatory lending is harmful and needs to be stopped," said Micah S. Green, president of The Bond Market Association. "Imposing open-ended liability on secondary market participants for the actions of lenders, however, will ultimately have the effect of limiting credit for those who need it most. Using unbounded assignee liability to combat predatory lending is bad public policy that Congressmen Ney and Kanjorski are wisely trying to stop"
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|Title Annotation:||Business Alert|
|Date:||Apr 1, 2005|
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