Mortgage Brokers, Bankers Take Stand Against Proposed Lending Rules
- Apr 28, 2008
Washington, D.C.–Facing tougher regulations, the mortgage industry is fighting back, the New York Times said Monday. The Federal Reserve’s plan to cease lender abuses–proposed by Fed chairman Ben Bernanke and Fed governor Randall Kroszner–has been met with criticism by lenders, including bankers and mortgage brokers, who say stricter rules could raise mortgage costs and increase lenders’ risk of being sued.Under the plan, mortgage companies would be required to disclose hidden fees often included in interest payments, prevent advertising that could be considered deceptive and illustrate how customers can afford their mortgage payments.As the plan’s comment period drew to a close earlier this month, the Fed was bombarded with more than 5,000 comments–mostly from lenders–about how the suggestions could hurt loans that haven’t been identified as problematic. Some also said the new proposal could stop them from lending to qualified borrowers.Three trade groups–the American Bankers Association, the Mortgage Bankers Association and the Independent Community Bankers of America–also criticized the plan in separate filings. The National Association of Home Builders and the National Association of Realtors also expressed reservations about the proposed changes.Regulators have been meeting with bankers, brokers and consumer groups; small community banks have also encouraged the Fed to reduce the range of the regulations, the Times said.