Why are State and National Mortgage Bankers Association presidents drumming up opposition to Federal legislation to set more stringent standards for subprime mortgages?
Would someone please explain to me their beef with a sensible requirement that lenders must show prospective borrowers are capable of repaying the loans?
According to an article in the Houston Chronicle, George Hanzimanolis, the president of the National Association of Mortgage Brokers, apparently believes Senate Bill 2452 will limit his members’ abilities to do business.
Perhaps that’s true.
Sen. Chris Dodd’s bill would impose new rules against doing business the way it’s been done in the past.
The way that got us into this mess.
In fact, I’d say the mortgage brokers and bankers who were all in cahoots that caused the mortgage meltdown, and subsequent crisis of credibility, have done a pretty dang good job of limiting their abilities to commit commerce all on their own, without any restrictive help from Congress.
I’d be mighty interested to hear Mssr. Hanzimanolis’ defense of plans to scuttle any legislation that would:
· Require lenders to ensure that borrowers have the ability to repay the loan
· Include taxes and insurance in subprime and non traditional mortgage loans
· Ban broker bonuses ("yield spread premiums") and prepayment penalties on subprime and non-traditional home loans
· Ban mortgage professionals from steering borrowers into higher priced mortgages
· Require mortgage brokers to act only in the best interest of the borrower
· Require accurate appraisals
· Require mortgage servicers to deal fairly with homeowners
· Establish strong remedies if these duties are not met
Why am I hearing the sound of crickets chirping?