Predatory Lending Reform?
By Kurt O'Keefe, Attorney at Law on Nov 6, 2007 in Chapter 13 Bankruptcy, Michigan
Legislation has been introduced to regulate the mortgage broker business, responsible for much of the predatory lending and sub-prime mortgage crisis which continues to rollick the financial markets.
That big government cure, regulation, is back. Not my favorite, tends to give the false impression that someone with a license is competent, ethical.
The proposed amendments to the Truth in Lending laws would, among other things, prohibit yield spread premiums, the practice by which the mortgage company gives a bonus to the mortgage broker for putting the consumer in a higher interest loan.
This should have been ruled illegal under the current RESPA law, but courts have differed.
The practice should also be illegal as a violation of the common law fiduciary duty of the broker as agent for the consumer.
Check the above link for further details on this proposal, and contact your Congresspeople with your wishes on these issues.
You can rest assured they are hearing from the mortgage broker industry.
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