ACB: Press Releases

Contact:	Robert Schmermund (202) 857-3104 Jim Eberle (202) 857-3145	Jim Eberle (202) 857-3145 (work) (703) 893-2593 (home) [email protected]	For Immediate Release August 8, 2006 #06-44
E-mail: [email protected]

ACB OBJECTS TO HUD PROPOSAL ON FANNIE, FREDDIE LOANS

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WASHINGTON, D.C. — America’s Community Bankers has objected to a proposal by the Department of Housing and Urban Development that could disadvantage consumers by limiting the loans that Fannie Mae and Freddie Mac can buy.

Under the proposal, HUD would specify the features of loans that Fannie and Freddie could use to meet HUD’s affordable housing goals as a way of preventing the purchase of predatory loans. The proposal also would allow HUD to use the “fast track” approach to changing the definition of predatory loans, circumventing the full rulemaking process.

ACB said in its comment letter that it has no reason to believe that Fannie and Freddie are buying or intend to buy loans that disadvantage consumers or to use such loans to meet affordable housing goals.

“We believe that the proposal could have the indirect consequence of reducing available mortgage credit by imposing definitions of predatory lending that conflict with existing laws and regulations, or by broadening the definition beyond that which is prudent,” ACB said.

“While some unscrupulous lenders take advantage of unsophisticated borrowers, we believe that alternative and new types of mortgages and mortgage terms extend homeownership opportunities to a greater number of lower income consumers,” ACB added.

Click here for the comment letter.

America’s Community Bankers is the national trade association committed to shaping the future of banking by being the innovative industry leader strengthening the competitive position of community banks. To learn more about ACB, visit www.AmericasCommunityBankers.com.

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