Much Needed Mortgage Reform Debate in Congress
What is mortgage reform? Well, I think since the amount of bank foreclosures on homes that the owners simply cannot pay for is alarming to many, and has been so bad in these past few years, that it is drawing attention on Capitol Hill from lawmakers who are concerned that people are being sold mortgages that the mortgage companies are not looking at the risk assessment thoroughly enough.
Also, they are looking at curbing and eliminating something called predatory lending, which is basically where mortgage lenders are “preying” on those that they know have a high chance of defaulting on a loan who do not have adequate income or a higher than desired debt to income ratio, just in order to get more mortgages and get their numbers higher.
Here’s the scary figure that prompted this congress interest : National foreclosure rates supposedly jumped about 47% in March from just one year ago. That was just two short months ago, and the new figures aren’t mentioned yet, but those are some very startling figures.
The problem many say congress is having in weighing in on this complicated issue is figuring our who all the players are and considering any legislations effects that may be unintended, and for that, lawmakers have to understand the complex mortgage industry, which many say is not an easy task. However, they still want to step in where public interest is at stake, so they are really looking at a catch 22 situation here if you ask me.
