FHA Mortgage Guide

With lenders getting slapped around on Capitol Hill, it’s not surprising to find that the Mortgage Bankers Association “cannot support” the current efforts at mortgage reform.

The idea of “broad national uniformity” sure sounds enticing, the idea of having one set of mortgage rules across the country. But if federal rules are weak and pre-empt stronger state regulations, then it becomes impossible to enforce those state regulations — the very situation we have today.

HOEPA — the Home Ownership and Equity Protection Act — is now a useless disclosure law which does not apply to purchase money mortgages, reverse mortgages or home equity lines of credit. While HOEPA does have the potential for stronger provisions for all mortgages, the Federal Reserve has never written such standards, thus protecting the lender constituency that it serves.

As to lender liability, right now lenders have no obligation to get the best rates and terms for borrowers. Shouldn’t we keep the current system in place, given how well it’s worked? A system with no distortions or excesses?

The mortgage situation is so bad that even Republicans — the party of big business — have climbed on the reform bandwagon. They may be Republicans, but they can still count votes, including the votes impacted by falling home values nationwide.

The MBA release is below:

MBA Concerned About Anti-Predatory Lending Legislation

Washington, DC (November 6, 2007) - Kieran P. Quinn, CMB, Chairman of the Mortgage Bankers Association (MBA) today expressed concerns about H.R. 3915, the Mortgage Reform and Anti-Predatory Lending Act of 2007. The bill was marked up today in the House Financial Services Committee and passed the Committee by a vote of 45-19.

Mr. Quinn issued the following statement:

“While the Committee accommodated a number of concerns we raised with the bill, we regret that the Committee did not address a series of other important issues. We cannot support a bill which does not provide broad national uniformity in the fight against predatory lending. We want a clear, national standard for lenders to adhere to and for consumers to hold lenders accountable to.

In addition, the ‘rebuttable presumption’ provision exposes a lender to liability even when a loan meets the qualified safe harbor requirements, defeating the point of having a safe harbor. Further, we have serious concerns that the well-intentioned renter provisions will make it harder for homes in the foreclosure process to be sold to families and other third parties. We also fear that the lower HOEPA triggers will eliminate certain good products from the mortgage market, and thus eliminate viable choices for some borrowers.

We commend the Committee for the open process they used in producing this bill and look forward to working with Chairman Frank, Ranking Member Bachus and the rest of the committee to help craft a bill that will provide the best protection for borrowers, without restricting access to credit for worthy homebuyers.”

Check out these FHA resources for more information

This entry was posted on Friday, November 9th, 2007 at 5:29 am and is filed under FHA, FHASecure. 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.