Thursday, May 17, 2007

Maybe it's just a little too late

I passed on commenting on the Home Loan Fairness Act last week as I was waiting for something a little more exciting to happen, hmmm... Yawn! The press release discusses the drive behind the legislature but I fail to see how this bill, if passed by the house, will do any bit of good on a few levels. 1) How can they say it will prevent a crisis that we are already in? The first paragraph says it all... Hello! 2) The existing lenders have already been forced to tighten their guidelines. Investors suddenly remember why they did not lend money to less-than-creditworthy borrowers before the sub-prime market emerged and are no longer buying the paper. The "defunct lenders" have shut their doors and many are facing bankruptcy. Here's a great website to visit. 3) There are already issues enforcing compliance with current laws in place to protect consumers and who must disclose what varies on who is originating the loan. The bill at least includes all types of "lenders" to disclose the non-traditional terms, however, will the fine-print get the attention it deserves? Please don't get me wrong, I am all for protecting consumers from predatory lending. I counsel my clients who have found it necessary to obtain non-traditional loans and continue with follow-up. I affiliate myself with two associations whose platforms are ethics in lending. I have searched for my own peace of mind for anything other than fluff on this bill and have yet to find it. I just don't get it, if someone out there does, please enlighten me... Again, I stress the importance of educating consumers.