I have to give it up to Rep. Elijah Cummings (D-MD) who has led the fight for fairness in subprime mortgage lending, even before it was cool. Hopefully he and other CBC members will continue their efforts as the issue gains momentum in the public eye.

From May 2007:

Rep. Elijah E. Cummings, a Democrat who represents parts of Baltimore City and Howard County, responded to Federal Reserve Chairman Ben S. Bernanke’s comments on the subprime market Thursday. Cummings issued an open letter calling for more federal supervision of subprime lending, including more rigid requirements for making sure borrowers will be able to repay their loans and keep the homes they buy.

“We are concerned that current regulatory oversight has not kept pace with deteriorating credit standards or the growth of unfair and deceptive lending practices,” reads the letter signed by Cummings and eight Democratic representatives from six other states and the Virgin Islands.
Cummings and the other legislators called for the Fed to use authority given to it by a 1994 law called the Home Ownership Equity Protection Act to make subprime lending fairer and more stable. The law, known as HOEPA, allows the board to prohibit practices relating to mortgage and refinancing loans it finds to be unfair.

One measure in their letter would require that lenders establish a borrower’s ability to repay over the life of a loan, because some subprime loans have payments that increase as time goes on. Another would restrict the ability of lenders to qualify borrowers without documenting their income or assets.

The letter makes other requests, including one that the board require that fees and prepayment penalties be reduced, mandate pre- loan counseling, and increase the disclosure of alternative mortgage products.

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