WASHINGTON, DC - Doug Duncan, Chief Economist and Senior Vice President of Research and Business Development for the Mortgage Bankers Association (MBA), testified before a hearing of the Senate Committee on Banking, Housing and Urban Affairs. Duncan addressed predatory lending, home foreclosures and federal efforts to protect consumers.
"The mortgage industry has been extremely innovative in developing products and tools that create homeownership opportunities, expand affordability and facilitate greater consumer choice that has helped our country reach a near 70 percent homeownership rate," said Mr. Duncan. "MBA is concerned that approaches such as rigid, new underwriting standards and the imposition of suitability requirements will rollback hard fought homeownership and fair lending gains and will stifle innovation and take good financing options out of the hands homeowners, limiting consumer choice. The effect will be to reduce available and affordable credit, undermining our mutual goal of putting Americans in homes and keeping them there. The mortgage market has performed well for consumers and for the larger economy and any policy that is not based on sound facts has the potential to undermine these benefits."
Mr. Duncan also addressed concerns about the connection between industry practices and failed loans.
"Abusive lending is a stain on the mortgage industry, and MBA is committed to finding solutions to help weed out bad actors," said Mr. Duncan. "Nationally representative data show that current foreclosure rates are within normal historical ranges and that the incident of foreclosure is largely driven by loss of employment, illness and other life events, and not by specific mortgage products. Nobody wins when homes are lost to foreclosure. The process can have a devastating affect on consumers and communities as well as lenders and their investors."
Duncan shared MBA's perspective on what steps Congress can take to help protect consumers from abusive lending practices.
"First, make financial education a priority for all Americans, empowering them with knowledge and giving consumers the tools to make good decisions," continued Duncan. "Second, simplify the mortgage process and make it more transparent so consumers can better understand the details of the transaction and so they can more easily shop for their loan from different lenders. And finally, Congress should pass a strong and balanced uniform national standard for home loan lending with increased consumer protections."
