Federal Reserve Chair Ben Bernanke, in a speech to the Operation HOPE Global Financial Dignity Summit in Atlanta on Thursday, stated of the attempts to correct previously lax mortgage lending standards that it "seems likely at this point that the pendulum has swung too far the other way, and that overly tight lending standards may now be preventing creditworthy borrowers from buying homes, thereby slowing the revival in housing and impeding the economic recovery."
I urge the administration to heed Chairman Bernanke's warning. I have repeatedly called on the administration to revise its proposed rule that would prevent responsible homebuyers from obtaining Qualified Residential Mortgages (QRMs) by requiring a 20 percent down payment. By putting into effect the 20 percent down payment requirement for Qualified Residential Mortgages, the administration is exacerbating the housing recession and preventing recovery, just as Chairman Bernanke warned Thursday. If the administration is serious about improving the economy, it cannot impose overly restrictive rules like the one that is on the table now and expect economic recovery.
Last year, Senators Kay Hagan, D-N.C., Mary Landrieu, D-La., and I, led a bipartisan group of 39 Senators in writing a letter urging federal regulators to avoid restricting credit to middle class families working to own a home. Over 250 members of the U.S. House of Representatives joined together to write a subsequent letter opposing the rule. I will continue to press this issue as a vital part of our economy recovery.