Industry NewsMortgage

Congress debates lending crackdown vs. hands-off approach

Restrictions on lenders could help -- or hurt -- borrowers

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Lawmakers must weigh the potential impact on housing and financial markets as Congress debates whether to impose new restrictions on mortgage lenders and provide additional help to troubled borrowers. With more than 1.5 million homeowners facing interest-rate resets by the end of next year, some legislators are opposed to clamping down too hard on mortgage lenders, saying tightened underwriting standards have already created a credit crunch. "A comprehensive consumer advocacy driven predatory lending bill is not the answer," Rep. Tom Price, R-Ga., said in prepared remarks submitted for a Congressional hearing today. "It is tantamount to fighting the last war and will only make the markets more skittish as they have to react to new underwriting standards and liability issues making the situation worse, not better." But others said Congress should act to make sure mortgage lenders don't take advantage of borrowers by offering them complex loans they don't fully understand, and also provi...