Archive for the ‘Fannie Mae’ Category

Exactly where is the outrage for this appropriation – why hasn’t ACORN stormed the homes of these workers?

April 3, 2009 – WASHINGTON (AP) — Mortgage finance giants Fannie Mae and Freddie Mac plan to pay more than $210 million in bonuses through next year to give workers the incentive to stay in their jobs at the government-controlled companies.

The retention awards for more than 7,600 employees were disclosed in a letter from the companies’ regulator released Friday by Sen. Charles Grassley of Iowa, the senior Republican on the Senate Finance Committee. The companies paid out nearly $51 million last year, are scheduled to make $146 million in payments this year and $13 million in 2010.

“It’s hard to see any common sense in management decisions that award hundreds of millions in bonuses when their organizations lost more than $100 billion in a year,” Grassley said in a statement. “It’s an insult that the bonuses were made with an infusion of cash from taxpayers.”

Fannie and Freddie declined to comment on Friday. Fannie had disclosed that it plans to pay four top executives at least $1 million each in retention payments that run through February. Freddie has yet to report on which executives are in line for the awards.

The two companies, hobbled by skyrocketing loan defaults, were seized by regulators last fall and operate under close federal oversight with new chief executives installed by the government. Since the takeover, Fannie Mae has received $15 billion in federal aid, while Freddie Mac has received nearly $45 billion.

The companies’ federal regulator, James Lockhart of the Federal Housing Finance Agency, defended the bonuses in a March 27 letter to Grassley, noting that the collapse of the company’s stock prices “destroyed years of savings for many” workers. The companies’ stocks now trade below $1, down from more than $60 in fall 2007.

Lockhart denied a request Grassley made last month to release names of employees receiving at least $100,000 in bonuses, citing “personal privacy and safety reasons.”

More than 70 percent of new loans in recent months have been backed by Fannie and Freddie. They own or guarantee almost 31 million mortgages worth about $5.5 trillion, more than half of all U.S home loans.

Keeping the companies “operating at full speed was best for the housing markets and best for the economy,” Lockhart wrote. “That would only be possible is we retained the Fannie and Freddie teams.”

But many lawmakers have little sympathy for that argument amid a public outcry over roughly $165 million in bonuses paid out last month by bailed-out insurance giant American International Group.

Earlier this week, the House passed a bill that aims to keep bailed-out financial institutions from paying their employees hefty bonuses after lawmakers had second thoughts about their vote two weeks ago to tax the bonuses away. The bill would allow the bonuses if the Treasury Department and financial regulators determine they are not “unreasonable or excessive.”

Initially after the AIG flap, President Barack Obama had said he would “do everything we can to get those bonuses back.” But the White House later backed down as it worked to ensure any restrictions on bonuses didn’t alienate the banks and investors needed to help clean up the financial mess.


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(NRO) – Before George Delano Bush unveils yet another vast, socialist scheme in response to today’s financial turmoil, his administration should try something as simple as ABC. While the following may not solve the problems of all the institutions in distress, it may be the best bet to minimize the damage from the implosion of two of the largest failed enterprises: Fannie Mae and Freddie Mac.

Now that these two entities have been fully nationalized, they should be divided into much smaller parts and sold off. This can be accomplished in six steps.

First, declare that Fannie and Freddie are dead. Make this painfully clear to everyone by using crowbars to pry the brass nameplates off of their respective headquarters buildings.

Second, pour their assets into a new, temporary agency whose legal authority expires within 90 days. The Asset Breakup Corporation will supervise Fannie and Freddie’s orderly dismemberment and sale in much smaller pieces.

Third, use Fannie’s and Freddie’s databases to create a list of their customers ranked alphabetically according to the individual homeowners’ surnames.

The first set will contain people whose surnames begin with the letter “A.” Americans named Aaronson, Adams, Alvarado, and Antonucci. The second will consist of those whose surnames begin with “B.” People named Baca, Benson, Berkowitz, and Brooks will compose this category. Next, people surnamed Caruso, Charles, Chavez, and Chung will populate the “C” group.

This simple method soon would divide Fannie’s and Freddie’s assets easily, fairly, and transparently into 26 distinct slices.

This method automatically would minimize risk. Rich people and poor folks, hard workers and slackers, cheapskates and spendthrifts, city slickers and country bumpkins, Southerners and Northerners, Pacific surfers and Atlantic lobstermen, blacks and whites, the young and the old, and everyone in between are scattered evenly and randomly across the alphabet. The “A” group, “D” group, or “W” group all will include many diligently paid mortgages and some turkeys. Some mortgage owners will live in thriving communities while others will reside in sleepy little towns. Some will bask in the Sunbelt while others endure endless rain.

By evenly spreading risk this way, any business that purchases these blocks of former Fannie and Freddie assets will be confident that there will be enough performing mortgages to compensate for those that have gone sour.

The alternative — selling these assets by geographic region, according to their current status, or by homeowners’ incomes — would yield a predictable and understandable result: Investors would line up to purchase mortgages belonging to creditworthy, high-income homeowners in affluent parts of the country. Taxpayers would get stuck with non-performing mortgages from, say, downtown Detroit or New Orleans’ embattled Lower Ninth Ward.

Fourth, each “lettered” company will contain hundreds of thousands of units across which to average risk. Similarly, each “lettered” company’s mortgages, on average, should approximate the balance due on a typical Fannie/Freddie loan. As of last June 30, according to slide 33 of its Investor’s Summary, the average Unpaid Principle Balance on a typical, single-family, Fannie Mae loan was $146,503. So, if the letter M group has 1 million such mortgages, it should be worth $146.5 billion. While the winning bidder will end up paying “too much” for mortgages with balances due of say, $125,000, those homeowners who owe $175,000 will have their debts purchased at a discount.

Auctioning off these 26 units will determine what proportion of this price the market is willing to bear. This price-discovery process would be far preferable to having the government cheat taxpayers out of potential cash by charging prices that are too low, or attenuating the current mess by charging prices that potential buyers will not pay, thus marooning these assets even longer.

Obviously, the A, E, I, M, S, and O groups will be larger than those for surnames starting with Q, X, and Z. The Q, X, and Z companies will be smaller, and thus cheaper, than the others. Thus, these 26 separate asset classes could be sold at a range of prices, which would make them affordable to market players of various sizes.

These 26 companies should be sold to the highest bidders in open outcry auctions accessible to the general public and members of the news media.

Fifth, once banks, hedge funds, private-equity companies, pension funds, or whoever purchases these assets, the new owners will be responsible for contacting mortgage holders and making payment arrangements. For many, it simply will mean giving them new addresses to which to direct their monthly checks. Other people will need to work out payment terms or take other actions to normalize their affairs.

Even if these loans need to be untangled and “de-securitized” in order to compensate various intermediaries between original borrowers and the winners of these auctions, far better to let 26 flowers bloom and manage this challenge privately than to leave a financial Katrina in the lap of the corrupt, spendthrift incompetents who are a nickel a dozen in Washington, D.C.

Meanwhile, the new private “landlords” who run these 26 new companies will have an instant audience of homeowners to whom they can market insurance, roofing supplies, lawn care products, air conditioners, steak knives, or anything else homeowners may want to buy. If these companies can make money this way, more power to them. The prospect of former Fannie and Freddie customers suddenly getting junk mail about the latest innovations in attic insulation may not be immediately appealing. But far better an outpouring of catalogues and coupons than the outrage of watching Uncle Sam toss 200 billion of our hard-earned tax dollars onto a giant bonfire.

Sixth, once these 26 alphabetically divided former components of Fannie Mae and Freddie Mac are sold off, the Asset Breakup Corporation will expire, 90 days after it was born.

At that point, the U.S. federal government should declare itself out of the home mortgage business, once and for all. Having made a Doberman’s breakfast of things, Uncle Sam should walk away and redouble his efforts to keep our borders safe and kill Islamic terrorists before they try to kill us.

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Cost of propping up Fannie Mae and Freddie Mac pegged as high as $25b, part of housing rescue.

WASHINGTON (AP) — A federal rescue of Fannie Mae and Freddie Mac could cost taxpayers $25 billion, congressional budget experts said Tuesday, as lawmakers put finishing touches on legislation that would tap the troubled mortgage giants’ profits to help save homeowners from foreclosure.

A costly rescue is just a worry, not a fact at this point. Peter R. Orszag, director of the Congressional Budget Office, predicted in a letter to lawmakers that there’s a better than even chance the government will not have to step in to prop up the companies by lending them money or buying stock.

But Congress is expected to vote as early as Wednesday on a housing measure that would give the Treasury Department authority to throw Fannie and Freddie a temporary lifeline.

It’s part of a plan to let hundreds of thousands of strapped homeowners refinance into more affordable, government-backed loans at fixed rates rather than losing their homes. Defying President Bush, the bill would send $4 billion to neighborhoods hit hardest by the housing crisis — something that has prompted the White House to threaten a veto.

Taking advantage of the momentum behind the election-year housing package at a time when economic woes top voters’ concerns, Democratic leaders planned to include a separate measure to increase the statutory limit on the national debt by $800 billion, to $10.6 trillion.

The housing bill also would create a new regulator and tighter controls on Fannie Mae and Freddie Mac, the government-sponsored companies that own or guarantee $5 trillion in U.S. mortgages — almost half the nation’s total.

And it would create a new affordable housing fund, which would be drawn from the firms’ profits and cover any losses from the foreclosure rescue plan.

Treasury Secretary Henry M. Paulson has been pressing to add to the bill temporary power for the government to offer unlimited sums to prop up Fannie Mae and Freddie Mac, a backup plan he says is intended to help calm investors and stabilize financial markets. The firms’ stocks have plummeted on fears about their financial stability in a chaotic housing market where falling home values and rising defaults have contributed to large losses at the companies.

Orszag said it’s most likely that the companies will remain afloat and the government won’t have to put up any money, but there’s a very small possibility that Treasury will have to step in to help cover losses at Fannie and Freddie topping $100 billion. The $25 billion estimate reflects his office’s best guess of how big a federal infusion would be needed.

“This is like two months in Iraq for something that involves, literally, market stability and (calms) global jitters,” said Sen. Christopher J. Dodd, D-Conn., the Banking Committee chairman. Dodd said he hoped the legislation would clear Congress by the end of the week.

With financial markets now assuming the measure will be approved, Orszag suggested the cost of inaction could be steep, too.

“It is arguable that if it were not enacted at this point, that the consequences could be quite severe,” he told reporters.

Paulson said in a New York speech Tuesday that Congress needs to quickly approve the Fannie and Freddie support package to make sure they maintain their critically important role in housing finance. He said their operations were “central to the speed with which we emerge from this housing correction.”

“Because of their size and scope, Fannie and Freddie’s stability is critical to financial market stability,” Paulson told an audience at the New York Public Library. “Investors in our nation and around the world need to know that we understand how important these institutions are to our capital markets broadly and to the U.S. economy.”

Later, at the Capitol, he used a weekly closed-door party lunch to try to sell the plan to Senate Republicans.

Paulson told the group that by showing a clear willingness to back up Fannie and Freddie, Congress actually would help ensure that no federal rescue would be needed.

“If you go in strong, it’s less likely that you’re going to have to use the strength,” Sen. Sam Brownback, R-Kan., said after the session.

However, Senate critics have charged that the open-ended offer of support exposes taxpayers to billions of dollars of losses.

Sen. Jim Bunning, R-Ky., told reporters that Paulson was trying to “ram down” his proposal to shore up Fannie Mae and Freddie Mac. That, said Bunning, “smacks of socialism.”

Rep. Jeb Hensarling, R-Texas, head of the conservative Republican Study Committee, said the companies should be privatized as part of any plan to rescue them.

“If Congress is forced to bail out Fannie and Freddie, I believe that we must take all the necessary steps to protect taxpayers” from a future collapse, he said.

However, many lawmakers in both parties regard a lifeline for the companies as vital to restoring investor confidence and market stability.

“Freddie and Fannie are important mainstays in the American economy, and we need to find solid footing for these enterprises before the economy can recover, right itself and get back on track,” said Sen. Judd Gregg of New Hampshire, the top Budget Committee Republican.

The $25 billion cost estimate “will pale in comparison to our long-term costs if we do not address this problem now, and so I fully support (Paulson’s) authority to provide funding for these institutions if it comes to that,” Gregg said.

Still, the measure faces delaying tactics from foes who oppose tying it to the broader housing package, particularly the $4 billion in neighborhood grants.

Paulson “may want this bailout so bad that he may give in to that,” said Sen. Jim DeMint, R-S.C. But Democrats “will use this as an excuse to pass some bad policy, and whether or not the president holds the line is the question right now.”

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Democrats Seize On Opponents’ Role; Bipartisan Failures

(WSJ) – As the falling housing market shakes financial institutions and pummels Americans in an election year, the nation’s economic woes have surged to the top of voters’ minds. The timely question: To what extent are politicians and regulators at fault?

Democrats are quick to blame Republicans, who were in power during the housing bubble and subprime lending frenzy. For years, America’s leaders failed to restrain the markets, companies, investors and consumers from the missteps that led to the most pervasive financial crisis in decades.

But in hindsight, the failure stretches across government and across party lines. At bottom are two strong currents. From the Republican president to urban Democratic congressmen, homeownership was pushed as an overriding and unquestioned goal. And many significant attempts at regulation were obstructed by the prevailing belief that the economy did best when financial markets operated as freely as possible.

The Bush administration coupled cheer-leading for homeownership with pressure on government-sponsored mortgage lenders Fannie Mae and Freddie Mac to provide funding for riskier mortgages. Both Democrats and Republicans stood by as Fannie and Freddie invested heavily in securities backed by subprime loans. Democratic congressmen pushed a federal law to restrain lending practices later discredited, but Republicans with some Democratic allies blocked or countered with weaker versions.

And at the Federal Reserve, Chairman Alan Greenspan, revered by both parties for his economic management, resisted using the Fed’s authority to more aggressively regulate lender behavior.

The blame spreads beyond Washington, to state capitals. In California, home to most of the country’s subprime lenders, Democratic state lawmakers didn’t support laws that would have imposed tougher regulations on a prized local industry. Politicians of all stripes cheered on the lower interest rates that sparked the boom in housing and excesses in credit.

Now, as Washington scrambles to repair the damage, momentum appears to be swinging back toward a more significant role for government in the American economy. Congressional Democrats have proposed the federal government guarantee up to $400 billion in troubled mortgages if lenders first write down their value. The Bush White House, which opposes the use of public money to bail out borrowers and lenders, is signaling it is open to compromise.

It is impossible to know whether a different approach to housing and financial regulation would have produced a different outcome. As in the 1990s stock-market bubble, many victims began as willing participants seduced by ever-rising prices and easy credit.

One thing is clear. The nation gorged itself on home-buying, something once considered as American as apple pie. “Let’s be honest with ourselves,” Richard Syron, chief executive of Freddie Mac and a former Carter Treasury and Federal Reserve official, said in December. “We went crazy as a country with the goals…saying, ‘Everybody’s got to have a house.'”

Below, a look at what went wrong.

Pushing the Dream

As far back as the Civil War, owning a home has been associated with civic virtue and moral behavior. Democratic and Republican administrations alike sought to raise homeownership through subsidies, tax breaks and dedicated agencies.

When George W. Bush took office, that push became a pillar of his “ownership society” campaign. “We want everybody in America to own their own home,” Mr. Bush said at a housing conference sponsored by the White House in October 2002. Earlier that year, he issued a “challenge” to lenders and others in the industry: Create 5.5 million new minority homeowners by the end of the decade. In 2003, he signed the American Dream Downpayment Act, creating a program that would offer money to the poor so they could secure a first mortgage.

These challenges came just as the lending industry was finding that subprime loans could be very profitable, at least in the short term. The administration’s push also bolstered industry claims that such loans — made to people with weak credit records — were answering a vital social need.

Homeownership is “our mission,” Angelo Mozilo, chief executive of Countrywide Financial Corp., a giant mortgage lender, said in a February 2003 speech. Citing Mr. Bush’s drive, Mr. Mozilo said lenders needed to bring the rate of minority homeownership closer to that of whites. One answer, he said, was to stop requiring sizable down payments from people who couldn’t afford them.

Countrywide and other lenders soon were promoting mortgages that allowed subprime borrowers to buy homes with little or no money down. The percentage of subprime borrowers who didn’t fully document their income and assets grew from about 17% in early 2000 to 44% in 2006, according to data from First American CoreLogic, a research firm in San Francisco.

Subprime was initially aimed at people with weak credit. But by 2005 and 2006, lenders encouraged many types of better-off borrowers to take such loans, including people with large incomes who wanted to speculate on rental housing. Many subprime loans were made to refinance low-income people who already owned homes, often loading them up with more mortgage debt and creating the risk of foreclosure.

Government-sponsored companies that buy and guarantee mortgages also joined the subprime fray. In 2002, the Bush administration began criticizing the companies, Freddie Mac and Fannie Mae, saying they were “trailing” the rest of the mortgage market in terms of their financing of homes for low-income people and minorities.

To push Fannie and Freddie, the Department of Housing and Urban Development, or HUD, eventually required that a higher percentage of loans they fund go to low-income borrowers. The pair met HUD’s requirements partly by buying the AAA-rated portions of mortgage securities created by Wall Street firms and backed by subprime home loans. After the initial low-payment period, many of those loans proved unaffordable to borrowers and are now going into foreclosure.

The homeownership rate, which rose from 65% in early 1996 to a record 69% in 2004, has since fallen below 68% and is almost certain to fall further as foreclosures rise and credit tightens for first-time buyers. Moody’s Economy.com forecasts that three million home loans will go into default in the 30 months ending in mid-2009, with about two-thirds of them resulting in foreclosures.

HUD says minority homeownership has increased by about 3.1 million since mid-2002 — more than two million shy of President Bush’s goal. The Bush administration is “proud” of having pushed for more minority homeownership and never favored reckless lending, says Tony Fratto, a White House spokesman.

From the time subprime took off in the mid 1990s, legislators and regulators tried to balance two conflicting goals: increasing low-income families’ access to credit and minimizing the potential for abuses by lenders. As home prices soared, tighter curbs usually lost out to a laissez-faire attitude in tune with the ruling Republicans. The result: Congress blocked legislation and the Fed was slow to regulate.

Congress Adrift

In 1999, Democrats, inspired by a groundbreaking antipredatory lending law in North Carolina, sought a federal equivalent. Predatory loans are typically described as those that involve excessive fees and high interest rates. Generally, such abuses occur in the market for subprime loans, those for people with weak credit records or high debt in relation to their income. Republicans, who controlled Congress, blocked the antipredatory legislation, arguing it would interfere with legitimate lending.

“Don’t apologize when you make a loan above the prime rate to someone that has a marginal credit rating,” Texas Republican Phil Gramm, then chairman of the Senate Banking Committee, told a group of bankers in 2000. “In the name of predatory lending, we could end up denying people with moderate income and limited credit ratings the opportunity to borrow money.”

From 2000 on, Democrats continued to introduce bills aimed at safeguarding against alleged predatory lending. In 2005, Rep. Brad Miller of North Carolina and two other Democrats introduced one such bill. Alabama Republican Spencer Bachus, the Republican chairman of a House committee on mortgage lending, was interested in co-sponsoring the bill.

In spring 2006, Mr. Bachus abruptly toughened his stance, in effect killing negotiations, Mr. Miller says. Barney Frank, then a senior Democrat and a co-sponsor of the bill, says while Mr. Bachus was cooperative, the Republican house leadership didn’t want any such bill reaching the floor.

Mr. Bachus disputes that the Republican leadership interfered with his efforts, adding: “I was very concerned about the subprime situation.” He says Democrats were the ones who toughened their negotiating stance. Mr. Bachus notes that many of his provisions are contained in a bill that the House approved last year.

Fed’s Light Touch

Even without congressional intervention, regulators had other tools to address potential abuse. But Alan Greenspan, chairman of the Federal Reserve until 2006, wanted to be sparing in their use.

In 2000, he rejected an informal proposal by then-Fed governor Edward Gramlich that Federal Reserve staffers examine the lending practices not just of banks but of their mortgage affiliates. In 2002, he rejected calls from Democrats to use the Fed’s power under the Federal Trade Act to write rules on unfair and deceptive practices.

Mr. Greenspan, in an interview, said examining mortgage affiliates wouldn’t have prevented fraud, and would have given shady operators the additional cover of claiming to be Fed-regulated. Regarding the calls from Democrats, he said he and the other governors were following the advice of the Fed’s professional staff. More broadly, he said, Congress, not the Fed, was best suited to define “unfair and deceptive” practices and to create legislation to address such lending.

He says he erred in thinking that other investors and market participants would adequately monitor lending standards in the mortgage-backed securities market. “I turned out to be wrong, much to my surprise and chagrin,” he said.

Mr. Greenspan and other bank regulators did take some steps to tighten oversight. In 2001, they barred banks from making “loans to borrowers who do not demonstrate the capacity to repay the loan.” But that didn’t explicitly apply to state-regulated finance companies and mortgage brokers, the entities that originated the majority of subprime loans. Many observers say the Fed also fueled the housing bubble by keeping short-term interest rates low in 2003 and 2004.

The pendulum is now swinging back toward intervention. Mr. Frank last November pushed an aggressive antipredatory lending bill through the House with the cooperation of Republicans. Among other things, the law would hold firms that package mortgages into securities responsible if those mortgages were predatory — even if someone else, like a mortgage broker, originated them. The Senate has yet to take up the matter.

Rep. Scott Garrett, a New Jersey Republican who actively opposed many antipredatory-lending bills, says earlier action might not have mitigated the subprime crisis. He says innovation in the lending market would have found a way around even an all-encompassing bill. “Just a year ago we were talking about how great it was [that] the highest percentage of Americans ever were in their homes,” he says.

A State’s Blind Eye

The nation’s laissez-faire climate permeated California, where subprime lending soared as home prices outraced incomes. Here, regulatory shortcomings spanned party lines. Republican legislators generally opposed anti-predatory lending bills. And Democrats, who controlled the state legislature, didn’t want to threaten one of the state’s star industries. The state’s regulators, meanwhile, were poorly equipped to oversee the booming mortgage industry.

California banks are regulated federally, some jointly with the state’s Department of Financial Institutions. But the largest subprime originators were other kinds of institutions: mortgage brokers and finance companies which were overseen by the Department of Real Estate and Department of Corporations, respectively.

The Department of Corporations, which regulates more than 300,000 corporate entities in a wide variety of investment and financial businesses, has long been business friendly. Spokesman Mark Leyes says it has to strike a balance between regulating and facilitating business. “We’re the cop, but we’re the friendly cop,” he says.

Since 2003, the department had been run by a series of interim commissioners. Preston DuFauchard, an assistant general counsel for Bank of America, was appointed and confirmed commissioner in June 2006. That year, companies regulated by the department loaned $252 billion to Californian home buyers.

But the mortgage industry wasn’t the top priority. Mr. DuFauchard says his first tasks were to bring securities regulations in line with federal rules and to tackle concerns involving financial scams against senior citizens. Mortgages moved to the top of the list only in early 2007, after a high-profile California lender collapsed.

Armed with 27 examiners for 4,800 consumer-finance companies, including mortgage lenders, the department examined mortgage companies once every four years. The department checked whether these companies charged proper fees to borrowers and kept adequate capital reserves, but it generally wasn’t tasked with assessing whether the loans themselves were sound.

In August 2006, the department examined Irvine, Calif.-based New Century Financial Corp., one of the biggest subprime lenders, and found no violation of state laws. What the examiners missed, because it wasn’t technically their mandate to look, was the rapid corrosion of loan quality that would force New Century out of business seven months later.

That same month, the department notified Ownit Mortgage Solutions, Agoura Hills, Calif., another big subprime lender, that it was four months late filing its 2005 audit report and levied a $1,000 fine. In December 2006, unable to honor commitments to repurchase defaulting mortgages from investors, Ownit ceased all lending and filed for bankruptcy protection. Only nine months after that did the Department revoked its license.

“The Department of Corporations effectively fulfilled our obligations as state regulator of both” New Century and Ownit, says spokesman Mr. Leyes.

In January 2007, Democratic State Sen. Michael Machado pressed Mr. DuFauchard, the Department of Corporations commissioner, to adopt tougher federal guidelines for state lenders. Mr. DuFauchard began the process of approving the rules, but cautioned it could take months. Enforcing them “may be a bigger pill than the Department of Corporations can swallow with existing resources,” he told the state senate banking committee.

Last summer, after soaring defaults ended the most questionable practices, the department swung into action. Mr. DuFauchard said the federal guidelines would apply to state lenders effective January 2008. He also initiated talks that led to mortgage-servicing companies agreeing to extend some initial interest rates to protect some homeowners from defaulting.

The department has added seven examiners while the number of mortgage lenders it oversees has shrunk by more than 100. It also has broader scope to audit licensees. Under a new state law, subprime and nontraditional mortgage lenders must evaluate a borrower’s ability to repay the loan over its full life, not just during the period of introductory fixed interest rates. The state legislature had blocked such a provision back in 2001.

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