Merkley, Klobuchar Amendment Banning Liar Loans Approved

[babylonsister]

http://washingtonindependent.com/84677/merkley-klobuchar-amendment-banning-liar-loans-approved

Merkley, Klobuchar Amendment Banning Liar Loans Approved
By Annie Lowrey 5/12/10 4:57 PM


This afternoon, an amendment protecting mortgage consumers from predatory lending practices made it into Sen. Chris Dodd’s (D-Conn.) financial regulatory reform bill. The Senate approved the amendment by Sen. Jeff Merkley (D-Ore.) and Sen. Amy Klobuchar (D-Minn.) 63 to 36.

The new language prohibits mortgage lenders from receiving hidden payments when they sell high-cost loans and prohibits companies from giving loan officers higher pay for selling riskier or higher-fee loans. It also bolsters underwriting standards, making sure that homeowners can really afford their mortgages and precluding lenders from offering “liar loans” and “no-doc” loans.

“Deceptive mortgage practices like hidden steering payments directly led to the Wall Street meltdown and resulted in millions of families losing their homes,” Merkley said in a statement. “We took a huge stride forward today in the fight to restore fairness for homeowners and strengthen the financial foundations of our families.”

[Scuba]

1. A tepid step forward