\nSix trade groups representing lenders said parts of the Senate housing bill are too restrictive and will expose lenders to lawsuits.\n<\/p>\n
\nJune 17, 2008: 6:08 PM EDT\n<\/p>\n
\nWASHINGTON (AP) — Mortgage industry and business groups are urging lawmakers to drop pieces of a housing bill they say would be too restrictive on lenders.\n<\/p>\n
\nSix trade groups on Tuesday told lawmakers shepherding a comprehensive package of housing legislation through Congress that the bill would impose too-strict standards on lenders, requiring them to determine what kind of loan is best for each borrower.\n<\/p>\n
\nThat standard will expose lenders to potential lawsuits, and force them “to reduce the number and type of products to consumers,” according to a letter written by the Mortgage Bankers Association, U.S. Chamber of Commerce and other groups to Sens. Christopher Dodd, D-Conn., and Richard Shelby, R-Ala., the two senior members of the Senate Banking Committee.\n<\/p>\n
\nThe letter also criticized a portion of the bill that creates a nationwide licensing system for mortgage brokers and loan officers.\n<\/p>\n
\nThe groups say federal regulators should oversee the system, rather than the Conference of State Bank Supervisors and the American Association of Residential Mortgage Regulators, which have been putting together a national licensing system since 2004.\n<\/p>\n
\nThe industry groups expressed support for more prominent pieces of the housing package, including a new program under which the government will help refinance around 400,000 new loans for struggling homeowners, and tighter regulation of government-sponsored mortgage finance companies Fannie Mae (FNM, Fortune 500) and Freddie Mac (FRE, Fortune 500).\n<\/p>\n
\nThe bill also changes the limit on the size of loans that can be purchased by Fannie and Freddie to $625,000, up from their traditional limit of $417,000. The limit has temporarily been raised to as high as $729,750 in expensive parts of the country as a result of the economic stimulus package signed by President Bush in February.\n<\/p>\n
\nThe banking panel passed an earlier version of the bill last month, and the full Senate was expected to vote on it as soon as this week.\n<\/p>\n
\nDodd said in a statement that the bill “takes important steps toward restoring safety and stability to the housing markets.”\n<\/p>\n
\nA Dodd spokeswoman wasn’t immediately able to comment on the industry’s criticism. A Shelby spokesman declined to comment.\n<\/p>\n
\nAlso signing the letter were the American Financial Services Association, the Consumer Bankers Association, the Consumer Mortgage Coalition and the
\nFinancial Services Roundtable.<\/p>\n","protected":false},"excerpt":{"rendered":"
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