Legislation & Lobbying
Feds Promise Loan Reform; States Act
Posted Jul 10, 2007 1:33 PM CST
By Martha Neil
In the wake of widespread reports that mortgage abuses by so-called subprime lenders have led to increased loan foreclosures, federal and state legislators have expressed concern and promised new laws to check fraudulent practices. But so far, federal lawmakers have focused primarily on holding hearings on the subject, prompting state lawmakers to act.
Some 85 bills have been introduced in 30 states to curb loan abuses, such as refinancing homeowners into mortgage loans they obviously can't afford to repay, reports Bloomberg.
Members of Congress were calling for federal legislation months ago. (See this April ABAJournal.com post.) However, "congressional action so far has mostly been limited to hearings on the subprime crisis, which has forced at least 60 mortgage companies to halt operations, go bankrupt or seek buyers since the start of 2006," Bloomberg writes.
There has also been criticism that federal agencies have been lax about regulating lending abuse. (See prior ABAJournal.com post.)