Lowey Applauds Bernanke Commitment to Act on Subprime Mortgages Lawmaker Encouraged Fed to Protect Borrowers From Predatory Lending

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Lowey Applauds Bernanke Commitment to Act on Subprime Mortgages Lawmaker Encouraged Fed to Protect Borrowers From Predatory Lending

Congresswoman Nita Lowey (D-Westchester/Rockland) today commended Chairman of the Federal Reserve Board Ben Bernanke for calling for tougher restrictions on lenders and enforcement of existing laws to protect borrowers from predatory practices in the mortgage industry. Lowey contacted Bernanke two weeks ago to encourage the Fed to take such steps.

"I am pleased that Chairman Bernanke has heard my voice and those of borrowers around the country who are struggling under the weight of unreasonable mortgages and predatory lending tactics," said Lowey. "The current crisis is resulting in mortgage defaults and foreclosures, and it is threatening American confidence in the economy. The Fed must act swiftly to propose new rules to protect consumers."

On September 6th, Congresswoman Lowey contacted Chairman Bernanke to encourage him to exercise the Federal Reserve Board's authority of the mortgage industry by strengthening relevant rules and ensuring that the finances of the American people are protected. Lowey encouraged the Fed to: (1) mandate clear and explicit fiduciary responsibility with mortgage lenders; (2) crack down on misleading mortgage advertising and foreclosure rescue scams; (3) prevent lenders from discriminating on the basis of race for the terms and conditions of mortgages; and (4) recommend civil penalties to deter those who engage in abusive practices.

Today, in testimony before the House Financial Services Committee, Chairman Bernanke said that a full review of consumer protection regulations was underway. He committed to supporting better disclosure, new rules, and more uniform enforcement in the fragmented market structure of brokers and lenders.

According to The Journal News, the nationwide subprime mortgage crisis is affecting New Yorkers at home. Through August, the number of foreclosure filings brought by creditors rose 39.4 percent from 2006, to 1,414. Actual judgments of foreclosure, in which the court authorizes lenders to take back the property that served as collateral for the mortgage, were up 61.8 percent to 424. In Rockland County, through July, filings were up 12.7 percent to 692 and judgments were up 94.4 percent to 175.

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