An adjustible floating rate mortgage could sink your ship of state. But don’t count on the government bailing you out….
September 3, 2007
An adjustible floating rate mortgage could sink your ship of state. But don’t count on the government bailing you out. Those working in Rome on the Potomac believe that the free-market system only exists to prey upon borrowers. Nevermind the fact that borrowers were the beneficiaries of five years of artificially low rates….
“Most of the other bills are still in planning stages, like numerous measures to regulate and penalize mortgage lenders who engage in predatory lending. Schumer acknowledged, however, that it won’t help anyone already suffering with a bad mortgage.
“This won’t do anything about what happened in the past, but it will prevent the present crisis from getting worse, because mortgage brokers are still preying on these people,” Schumer said.”
http://biz.yahoo.com/ap/070903/risky_mortgages_congress.html?.v=1
“Bad” mortgages or not, private equity sources know how to do due diligence on vetting potential subprime borrowers. We don’t just need a return to the liquidity in the credit market, we need a return to common sense in lending without government interference.
Correct me if I’m wrong but am I seeing another bad banker news release coming from the Hill?
Frank Statement on the President’s Remarks on the Mortgage Markets
Washington, DC – Rep. Barney Frank (D-MA), Chairman of the House Committee on Financial Services, today offered the following statement in response to President’s address on problems in the mortgage markets:
“I welcome the Administration’s recognition that a greater public response is required and I look forward to working with them because I agree with a number of specific things that they propose. The Financial Services Committee has already advanced legislation, including a GSE bill that awaits Senate consideration, and we hope to send the FHA bill over soon. We also are working with the Ways and Means Committee to address the tax issues involved. However, there are some points of difference that we will need to work out going forward:
With regard to the FHA, going forward, I don’t think that working people and lower income people who are making payments to the federal government should be charged more than others.
Second, I agree that the rules that regulators have developed for banks have been good ones, but I believe that federal action is necessary to apply them to all originators and the time for further study is over.
Third, there should be some rules to provide some quality assurance to investors in the secondary market. At his speech in Jackson Hole, Federal Reserve Chairman Bernanke noted the need for modification of the securitization process to provide greater investor protection and increased incentives for responsible lending. I believe that well- drafted legislation is essential to achieving this.
Next, I continue to believe that the portfolios of Fannie Mae and Freddie Mac can play a bigger role than they are currently are playing, particularly in helping the refinancing of subprime mortgages that are about to experience significant interest rate increases. I believe that the Administration’s objections to this are not based on safety and soundness grounds, but represent their one remaining ideological refusal to recognize the need for a greater institutional role in this regard.
Finally, there needs to be a federal role in the construction of new affordable housing and preservation of existing affordable housing.”
http://www.house.gov/apps/list/press/financialsvcs_dem/press083107.shtml
For more information about HR1852, The Expanding Homeownership Act of 2007, please click on the following link:
http://www.house.gov/apps/list/press/financialsvcs_dem/press050307.shtml
For more information about HR1427, The Federal Housing Finance Reform Act of 2007, please click on the following links:
http://www.house.gov/apps/list/press/financialsvcs_dem/press032907.shtml
http://financialservices.house.gov/index.shtml
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