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 DEC. 24, 2006
Nine Trade Groups are opposed to Changing Mortgage Rules
On Wednesday, December 20, 9 lending trade groups expressed their desire that mortgage regulators reconsider the proposed tightening of guidelines regarding the low introductory rate mortgages that have been being offered.


The nine trade groups sent a letter which was in response to a request that was made by members of the Senate Banking Committee. The committee asked regulators to focus in on the 2/28 ARM (adjustable-rate mortgage). They want the committee to examine the guidelines for how lenders should be required to explain and underwrite non-prime mortgages to borrowers. The lending groups are concerned in that they would like the lending industry to have the opportunity to consider making any changes or come up with some suggestions for change before the regulators begin their examination that the Senate committee is requesting. The lender's letter states that the Senate committee's request would dramatically change the rules surrounding the issuance of these types of ARMs, and would risk denying many potential buyers the opportunity to take out this type of loan. Members of the nine concerned lenders were: America's Community Bankers, the ABA (American Banker's Association) and the MBA (Mortgage Banker's Association).

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