Hillary Aims To Solve Mortgage Lending Problems, Aid Those In Low-Income Housing
by Jeff Dinelli
CNN is reporting that Hillary is looking to end mortgage lending abuses and help out families facing foreclosures. There is a growing problem of people facing losing their homes after accepting mortgages which are now too expensive. She is proposing a $1 billion fund to 1)help lenders catch up with their mortage payments; 2)change the terms of existing loans; and 3)set up counseling for those with major financial problems. "She pressed for eliminating penalties for early repayment of mortgages, which are often associated with less traditional home loans to individuals who fall short of qualifying for prime loans and turn to more expensive subprime mortgages." World markets have been unsteady watching U.S. turmoil regarding subprime mortgage markets and the growing number of defaults by people with less-than-stellar credit, which has led lenders to toughen up their standards regarding loans.
"We can look at the statistics, wring our hands, and continue to do nothing, or we can do what America has always done in times of difficulty: acknowledge that we face a real challenge, and confront it head-on with real solutions," Clinton said.
American Home Mortgage Investment Corp. and New Century Financial Corp., two huge lenders specializing in subprime loans, have filed for bankruptcy, and many other lenders have closed up shop. Bush feels the problem with subprimes is under control and not yet harming the economy as a whole, though the administration is closely watching the situation. Hillary feels that's not enough. "We need to help those facing the pain of foreclosure," Clinton said in a statement. "We need to secure the marketplace and put reforms in place right now."
According to CNN, this proposal "also includes requirements that mortgage brokers fully disclose their compensation to borrowers when they apply for a mortgage and require federal registration for mortgage brokers." She also wants to set aside $1 billion to beef up local and state funds protecting low-income housing.