Industry NewsMortgage

Congressional report backs suitability, predatory lending standards

Future-Proof: Navigate Threats, Seize Opportunities at ICNY 2018 | Jan 22-26 at the Marriott Marquis, Times Square, New York

A new Congressional report on rising delinquencies and foreclosures in subprime loans overstates the problem because it relies on "faulty, inflated data," the Mortgage Bankers Association maintains. The report, by the Congressional Joint Economic Committee, cites statistics from RealtyTrac and predictions by the Center for Responsible Lending to make the case for increased regulation of the mortgage lending industry. The JEC report cites a prediction by the Center for Responsible Lending that one in five subprime loans issued in 2005 and 2006 will default, and that 2.2 million families have lost or will lose their homes in the next several years. The report also relies on statistics from RealtyTrac, which claims 1.2 million foreclosures were reported in 2006 and that as many or more are expected this year. "All predictions are that we are facing a tsunami of default and foreclosures in the subprime market as homeowners face steep increases in their monthly payments and housing values r...