Bill seeks better loans for borrowers

WASHINGTON – Dec. 12, 2007 – Sen. Christopher Dodd, D-Conn., is expected to introduce a bill that would require mortgage lenders to issue only loans that are beneficial to borrowers and that borrowers are able to repay.

The proposal by the chairman of the Senate Banking Committee and presidential candidate would not only force mortgage lenders to act in the best interest of borrowers, it also would expose Wall Street firms to lawsuits as well as bar subprime mortgage lending practices such as prepayment penalties and yield spread premiums.

Dodd's proposal is in some ways similar to a measure sponsored by Rep. Barney Frank (D-Mass), which the House passed by a wide margin in November. Mortgage companies and banks are expected to come out in force against Dodd's bill.

Source: The New York Times, Vikas Bajaj (12/11/07)

© Copyright 2007 INFORMATION, INC. Bethesda, MD (301) 215-4688

Questions, comments or suggestions on this article? Have a news tip? Send a letter to the editor to: Newseditor@floridarealtors.org.