Snooze du jour:
Tuesday, December 13, 2005
Bills Put MBS Secondary Market In 'Jeopardy'
thehousingbubble2.blogspot.com
The Journal News reports on a predictable political move in a state that has experienced heavy foreclosures. "With Ohio leading the nation in foreclosures, state legislators and the mortgage lending industry are locked in heated battle over how best to protect consumers. Since the late 1990s, Ohio’s foreclosure rate has soared to three times the national average."
"The troubled climate, some officials say, is compounded by weak laws governing the mortgage industry which have fueled deceptive and unfair lending practices. 'It’s one of the leading contributors that force people into foreclosures,' said Sen. Gary Cates of predatory lending. 'It’s something we want to address.'"
"Bills in the Senate geared toward curbing predatory lending would bring the mortgage lending industry under the scrutiny of the state’s Consumer Sales Practices Act. The proposals introduced by Joy Padgett and Tom Roberts would allow consumers to sue lenders and possibly rescind deceptive loans."
"Some mortgage industry advocates, however, have resisted such regulations, arguing that the proposals fail to protect those backing the loans. 'The main thing we are opposed to is having (mortgage loans) under the consumer sales practices act,' said Karen Stypinski, president of the Ohio Mortgage Bankers Association."
"Because the proposals would allow consumers to rescind loans made deceptively, mortgages sold on the secondary market would be in jeopardy, she said. 'It would really hurt our industry,' she said. 'We can’t buy loans because we don’t know if 10 years down the road from now if we’ll have to rescind that loan and the borrower walks away.'" |
