Are House Democrats Doing A Poor Job Protecting Borrowers?

by Peter G. Miller
November 15th, 2007

I was interested to discover that, according to The Nation we are facing a coming foreclosure tsunami!

This, of course, is startling news. Not a single newspaper or magazine in the past year has even mentioned foreclosures, right? No congressional hearings have been held. Right? No proposed legislation has been suggested to deal with the 2 million households who are likely to face some form of foreclosure action this year. Right?

“The long-term challenge, says the magazine, “is to regulate an industry that, left to its own devices, seems to have eaten its young. Last week the Mortgage Reform and Anti Predatory Lending Act of 2007 passed out of Barney Frank’s House Financial Services Committee with the support of nine Republicans. It’s far from perfect, but it represents a small step in the right direction.”

Huh? Are you kidding? No, the Frank proposal is not perfect, if by “perfect” we mean the legislation that I would write. But to say that Frank’s efforts are a “small step” is outrageous. The Frank bill would finally license loan officers. It would establish a baseline obligation to get the best possible mortgage for a borrower. It would expose lenders to liability when they screw borrowers. It would eliminate most prepayment penalties and limit their impact by requiring that they lapse well before adjustable rate mortgages reset. This is important stuff, a huge improvement over today’s situation.
See: FHA Mortgages: House Committee Passes Massive Mortgage Reform Bill

If The Nation thinks the Frank bill is deficient they ought to consider what the Republicans offered. That would include a 2005 law to exclude mortgage modifications from the bankruptcy process, a rule which is hurting huge numbers of homeowners. They would’ve seen that under the Republicans there was no effort to rein in lenders, there was no effort to enhance lender regulation and there was no interest in helping consumers become equals in the marketplace.

Guess what? Mortgages, foreclosures and politics are all interrelated. If The Nation thinks that Democrats are doing a lousy job trying to help homeowners than the magazine is way off base and has forgotten the way it used to be when the party of big business controlled Congress.

For the full story from The Nation, see: The Coming Foreclosure Tsunami

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This entry was posted on Thursday, November 15th, 2007 at 4:20 am and is filed under , . You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.

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