Industry NewsRegulations

Mortgage lenders: New regs could derail real estate recovery

Industry groups pushing for legal 'safe harbor'

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At a meeting attended by top economic and housing policymakers in the West Wing of the White House last Thursday, the Obama administration heard these grave warnings on housing:If you force overly stringent home loan standards and legal liabilities down the throats of the mortgage and real estate industries this summer, many lenders will squeeze underwriting requirements on loans even tighter than they are today, cut back on originations and tack on additional "overlay" fees. All that, in turn, will suck the air out of the housing recovery, with punitive impacts on jobs, new home building and resales of existing homes.The consumers who get hit the hardest if excessive standards are adopted by the administration will be homebuyers and refinancers who are on economic tightropes already, especially first-time homebuyers, and lower and moderate-income African Americans and Latinos. Why make things even tougher for them?Though participants from the mortgage industry at the meeting...