Important Bill For Mortgage Firms By US Representative
US Representative Barney Frank, who chairs the House Financial Services Committee, is scheduled to meet this morning with mortgage brokers and lenders at the Federal Reserve Bank in Boston. He has invited a group of lenders that include Countrywide, GMAC, Washington Mutual,
Frank has proposed an important bill that would require the licensing and registration of mortgage originators, eliminate prepayment penalties that discourage buyers from refinancing on better terms, and ban lenders from paying rewards to brokers or their employees who manipulate borrowers into accepting higher interest rates than they are eligible to receive. Barney's proposed ban on incentives and rewards is pissing off the mortgage industry, but it is paramount that this bills gets passed to weed out the unscrupulous mortgage brokers and originators.
Massachusetts Governor Patrick is planning some great efforts also. Patrick is placing pressure on lenders to provide $5,000 for rent and moving expenses to families facing foreclosure. Only Option One Mortgage Corp. and Massachusetts Credit Union League have stepped up to the plate. The Governor has more hope for a short sales strategy that allows borrowers to sell their homes at current market value and pay back less than the full value of the loan. Lenders in such cases would be spared the cost of foreclosing on the properties and have the added benefit of being introduced to qualified potential buyers by nonprofit housing groups.
Frank plans to spend some of the day trying to encourage workout plans by introducing lenders to representatives of these nonprofit housing advocacy groups.
