Wednesday, April 25, 2007

Senate Passes Bill to Fine Mortgage Brokers

Yesterday, the Senate passed Senate Bill 216 which will fine mortgage brokers for making loans to people who might not be able to pay them back.

Quoting the Rocky:
Senate Bill 216, by Sen. Jennifer Veiga, D-Denver, is meant to reduce skyrocketing foreclosure rates in Colorado and crack down on those who take advantage of homeowners who can barely afford their house payments.

Veiga said the bill requires mortgage brokers to act in "good faith" when determining a borrower's ability to repay what are commonly known as subprime, nontraditional home loans.

The bill is meant to protect homeowners? How exactly? By preventing them from becoming homeowners in the first place?

Maybe there is something in the bill language that could clear all of this up, but terms like "acting in good faith" make the enforcement of this issue seem awfully subjective.

More from the Rocky...
Shawn Mitchell, R-Broomfield, and Ted Harvey, R-Highlands Ranch, a mortgage broker, said the measure forces brokers to act as "judge and jury" by requiring them to determine a borrower's "personal circumstances" and credit worthiness before processing a loan application.

Harvey warned the measure will cripple the state's mortgage lending and home-building industry if it becomes law.

The article also made mention that Steve Johnson, R-Loveland switched to vote with Democrats in support of the bill. Frankly, if Johnson ever did something conservative it would be a lot more newsworthy.

My favorite quote is bill sponsor Sen. Veiga, D-Denver, saying "We should have a higher standard for mortgage brokers." A higher standard indeed. A higher standard for Ministers, Public Officials, Judges, and of course that missing segment of people we trust... our mortgage brokers.

Edit: Apparently Steve Johnson has a wikipedia entry. I'm really at a loss for words as to how pointless that seems to me.

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