CRL Says Foreclosure Prevention Act Misses Key Point
Sunday, April 20, 2008
The Foreclosure Prevention Act of 2008 continues to generate buzz—this time from the Center for Responsible Lending (CRL), a consumer advocacy group that says leaving out loan modification provisions for judges is a big mistake.
This week, the Senate agreed to move forward with a bipartisan version of the bill—one that leaves out a controversial cram down solution that would have allowed judges to adjust loan terms from the bench.
The Mortgage Bankers Association (MBA) issued a statement supporting the removal of the provision and encouraged legislators not to move in that direction again.
MBA Chairman Kieran Quinn said, “I hope that Senators will keep their eye on that goal (the struggle of homeowners) and not attempt to attach to the bill partisan provisions such as bankruptcy cram down that would increase borrowing costs on all future borrowers and delay progress on this important bill.”
The CRL, on the other hand, says without the ability to help borrowers from the bench, the bill does little for homeowners who are now facing default.
“We are left with a bill loaded with special considerations for mortgage companies and builders that does very little for homeowners who were sold predatory loans by mortgage lenders,” said Quinn. “Any final bill hammered out between the U.S. House and Senate that is a serious effort to stem the foreclosure crisis must include meaningful relief to families to modify their mortgage in bankruptcy. Bankruptcy relief will stabilize communities, keep more than half a million families in their homes and provide lenders at least as much income as they would receive through foreclosure.”
This week, the Senate agreed to move forward with a bipartisan version of the bill—one that leaves out a controversial cram down solution that would have allowed judges to adjust loan terms from the bench.
The Mortgage Bankers Association (MBA) issued a statement supporting the removal of the provision and encouraged legislators not to move in that direction again.
MBA Chairman Kieran Quinn said, “I hope that Senators will keep their eye on that goal (the struggle of homeowners) and not attempt to attach to the bill partisan provisions such as bankruptcy cram down that would increase borrowing costs on all future borrowers and delay progress on this important bill.”
The CRL, on the other hand, says without the ability to help borrowers from the bench, the bill does little for homeowners who are now facing default.
“We are left with a bill loaded with special considerations for mortgage companies and builders that does very little for homeowners who were sold predatory loans by mortgage lenders,” said Quinn. “Any final bill hammered out between the U.S. House and Senate that is a serious effort to stem the foreclosure crisis must include meaningful relief to families to modify their mortgage in bankruptcy. Bankruptcy relief will stabilize communities, keep more than half a million families in their homes and provide lenders at least as much income as they would receive through foreclosure.”
