Industry News

Senator urges federal regulation of mortgage brokers

Initiative includes $300M in foreclosure prevention

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A bill that would increase federal oversight of mortgage brokers and a separate proposal to provide $300 million to nonprofit groups that help troubled borrowers is the "first major legislation to deal with the subprime foreclosure crisis as a weakening U.S. housing market threatens the overall economy," says author Sen. Charles Schumer, D-N.Y. Schumer said he introduced the plan to increase oversight of mortgage brokers and step up outreach to borrowers in order to implement recommendations of a Congressional report released last month. The report, "Sheltering Neighborhoods from the Subprime Foreclosure Storm," was produced by the Joint Economic Committee. Schumer's initiative, which has the support of Senators Sherrod Brown, D-Ohio, and Bob Casey, D-Pa., includes a bill that would extend federal enforcement of the Truth in Lending Act to all mortgage brokers and non-bank loan originators. The bill, The Borrower's Protection Act of 2007, would impose suitability standards for assessi...