NEW YORK, NY – July 14, 2008 – (RealEstateRama) — Congresswoman Carolyn B. Maloney (D-NY), Chair of the House Financial Services’ Financial Institutions and Consumer Credit Subcommittee, released the following statement today after the Federal Reserve unveiled its final rule to overhaul the mortgage lending industry in the wake of the subprime crisis:
“I applaud the Federal Reserve for putting forward a solid final rule to rein in abuses in the mortgage lending industry. I look forward to seeing this rule quickly implemented and strongly enforced.
“This rule will help eliminate areas of uncertainty that threaten to further weaken the market, and establish clear, well-balanced regulations that will benefit both borrowers and lenders. Unfortunately, however, the new rule won’t help the millions of homeowners who’ve already fallen behind or defaulted on their mortgages, but it can help to prevent another housing crisis.
“In particular, I was pleased to see that the new rule will limit prepayment penalties, require lenders to verify a borrowers’ ability to repay a loan, and prohibit lenders from making loans that borrowers can’t afford. I was also pleased the Fed will not make borrowers who want to sue a lender for violating the rule prove that the lender also engaged in a pattern and practice of violating the rule with other borrowers; this provision was viewed as confusing by lenders, and as unfair by consumer advocates.
“There are no easy answers to our current economic problems, but one thing is clear: we must address the root of our weakening economy – the housing crisis. We must keep families facing foreclosure in their homes and help other families avoid foreclosures in the future.
“Working in a bipartisan way, the New Direction Congress enacted an economic stimulus package that will provide relief to families in need, providing Recovery Rebates, and raising loan limits for mortgages backed by the FHA, Fannie Mae, and Freddie Mac, allowing more families to get into mortgages with better terms. And, the House and Senate have now passed comprehensive housing reform legislation; I’m optimistic we’ll be able to quickly iron any differences between the bills.
“While we have made progress, there is still much more to do. The Democratic Congress is committed to doing everything we can to keep the housing crisis from getting worse, and to bringing greater oversight to our nation’s financial institutions.”
Contact: Meghan O’Shaughnessy
(202) 225-7944 (o)
(202) 225-3703 (c)
