home subscribe advertise reprints e-mail help RSS about us LOG IN

Mortgage News

 

Mortgage News

HOT Topics

production

servicing

compliance

legal

fraud

secondary

jobs

appraisal

site map

www.loan-academy.com/
twitter linkedin
facebook google+
Search:

Mortgage News

News by Subject
Complete list of specialty news sections.

Purchase Subscription
Subscribe to MortgageDaily.com and get immediate access to all news, statistics and archives.

Mortgage Advertising
Reach mortgage executives, loan originators and other people tied to mortgage industry.

Consumer Mortgage News
Free mortgage news for prospective borrowers.

Mortgage Newsletter
Free e-mail newsletter with the latest headlines from MortgageDaily.com.

Mortgage News Reprints
Put entire MortgageDaily.com stories in your online or printed newsletter or publication.

Mortgage Feedget RSS code
Condensed MortgageDaily.com stories free on your Web site or for your RSS reader.

News Archives
Archive of MortgageDaily.com stories by month going back to 1999.

Press Releases
Reports and announcements from MortgageDaily.com.

Mortgage Statistics
Data and statistics for real estate finance.

Mortgage Directories
Directories of lenders, branch operators and mortgage service providers.

Mortgage Graphs
Directories of lenders, branch operators and mortgage service providers.

Political Mortgage News | Mortgage Laws
Mortgage people in politics. Political contributions by mortgage companies. Coverage of political support by lenders and executives. GSE lobbying and issues.



Dems Outline Mortgage Solutions

Mortgage industry plans from Clinton, Obama and Edwards

August 9, 2007

By PATRICK CROWLEY


photo of Patrick Crowley
As they slug it out across the nation vying for their party's presidential nomination, Democratic candidates have turned their attention to the mortgage industry.

The rash of problems plaguing the industry -- foreclosures, concerns about predatory lending, fraud -- are tailor made to the populist campaigns being waged by Democrats John Edwards, Hillary Clinton and Barack Obama.

Edwards, a former U.S. Senator from North Carolina and the party's 2004 vice presidential candidate, is running on a platform to help lift people out of poverty. He has a multi-tiered approach in calling for "strong national legislation to regulate mortgage abuses and prohibit predatory lending," according to his campaign Web site.

Edwards said the law he will pass will eliminate what he sees, and what some industry experts have identified, as the worst abuses in the mortgage market: loan flipping, mandatory arbitration clauses, balloon loans, steep prepayment penalties and excessive fees.

Lenders would be regulated nationally, held to uniform licensing standards and placed in a national database that would cite, among other items, disciplinary actions. Underwriting standards would be strengthened "to ensure that borrowers received affordable loans suited to their means."

And what Edwards described as "broker kickbacks," or yield-spread premiums, would be banned.

Edwards' plan also deals with homeowners facing foreclosure.

Homeowners facing excessive debt could file for bankruptcy, paying off the full market value of their homes but shedding "excessive debt" that came about through predatory lending practices, he said. A bankruptcy judge would still have final say and a homeowner could only use this option once.

For homeowners needing mortgage payment assistance Edwards could create a national Home Rescue Fund that would offer help with renegotiating new loan terms, finding a new lender or catching up with payments, though he has not said how much money would be put into the fund.

The fund would work with non-profit groups, community financial institutions, government agencies. And the Federal Housing Administration, Fannie Mae and Freddie Mac could be used to "work with community lenders to create affordable refinancing alternative for these families."

Clinton, the former First Lady and current U.S. Senator from New York, promises a "crack down on unscrupulous brokers" and a plan to "curb mortgage lending abuses (and) assist families facing foreclosure," according to her campaign's Web site.

Under Clinton's plan, prepayment penalties -- which are used by many subprime lenders -- would be eliminated.

"These penalties can lock borrowers into loans until the rates and monthly payments escalate," she said. "Families should not be discouraged from responsibly paying of their mortgages early."

Lenders would also be required to include the cost of taxes and insurance in the underwriting assessment of subprime, Alt-A, interest-only, no-money-down, payment option ARM's and other non-traditional loans under the Clinton plan.

Brokers would have to tell customers if their compensation is tied to loans with higher rates and fees. And Clinton said she would work with states to develop licensing standards while requiring federal registration of mortgage brokers "so that prospective borrowers can easily look up a broker's employment history, violations, complaints and other information," she said.

To help homeowners facing foreclosure Clinton would earmark $1 billion to support state programs that help at-risk borrowers keep their homes. She also proposes a "foreclosure timeout" for borrowers and lenders to find alternatives to foreclosure. And the GSE's role would be expanded to also provide assistance.

Obama, a U.S. Senator from Illinois, has the least detailed mortgage platform of the three major Democratic candidates. But he has a history of dealing with the situation.

According to his campaign Web site, Obama filed legislation in early 2006 called the STOP FRAUD act. The law did not pass but Obama said he will work to implement its provisions.

Obama's plan has a heavy focus on detecting and punishing fraud. It would increase funding for federal law enforcement programs, create new criminal penalties for mortgage professionals found guilty of fraud and require "industry insiders" to report suspicious activity.

"As the number of foreclosures skyrockets and the housing market becomes more vulnerable, we must establish stiff penalties to deter fraud and protect consumers against abusive lending practices," Obama said in a statement.

Obama also proposes spending $25 million for counseling to homeowners facing foreclosure.


Patrick Crowley is a feature journalist and blogger for MortgageDaily.com. He is also a reporter, blogger and columnist for The Cincinnati Enquirer.
e-mail Patrick at: [email protected]

Predatory Lending News
FTC and HUD settlements. Class action lawsuits. Predatory lending prevention. Archives back to 2001.




Yield Spread Premiums
Yield spread premium issues, studies and lawsuits. Mortgage wholesaler YSPs paid to mortgage brokers.



SUBSCRIBERS: Edit Subscription | Subscription Help | or call 214.521.1300

Subscribe Contact Us Site Map

Copyright © 2017 Mortgage Daily, D a l l a s
Subsribers Only:

AMC directory

ARM indexes

mortgage company directory

mortgage regulations

net branch directory

p r i c i n g engine directory

wholesale lender directory

More Mortgage News Resources (full site map):

advertising news

appraisal news

bank news

biggest lenders

commercial mortgage news

corporate mortgage news

credit news

FHA news

financial regulation news

foreclosure news

GSE news

jumbo mortgage news

interest rates

loan modification news

loan originator survey

LOS Newsletter

MBS

mortgage associations

mortgage-backed securities

mortgage books

mortgage brokers

mortgage compliance

mortgage conferences

mortgage directories

mortgage education

mortgage employment

mortgage employment index

mortgage executives

mortgage fraud

mortgage fraud blog

mortgage fraud local news

Mortgage Fraud Index

Mortgage Graveyard

mortgage insurance news

mortgage lawsuits

mortgage leads

mortgage lender ranking

mortgage licenses

mortgage litigation

Mortgage Litigation Index

Mortgage Market Index

mortgage mergers

mortgage news

mortgage politics

mortgage press releases

mortgage production

mortgage public relations

mortgage rates

mortgage servicing

mortgage statistics

mortgage technology

mortgage video

mortgage Webinars

net branch

net branch directory

nonprime news

origination news

originator tools

real estate news

refinance news

reverse mortgage news

secondary marketing

social media

servicing news

subprime news

wholesale lenders