MBA Reacts to Fed`s Proposed Rule on HOEPA

Kieran P. Quinn, CMB, Chairman of the Mortgage Bankers Association (MBA) issued this statement today following the Federal Reserve Board`s proposed changes to Regulation Z (Truth in Lending) under the Home Ownership and Equity Protection Act (HOEPA). The proposed rules would restrict certain lending practices and would also require certain mortgage disclosures to be provided earlier in the mortgage transaction.

`The Board`s proposed rule announced today strives to strike the balance between ridding the marketplace of abusive lending practices, while still preserving credit opportunities for worthy borrowers. This is a fine line to walk, and it is obvious that the officials at the Fed put a lot of thought into this proposed rule.

MBA has long supported better and more timely disclosures to consumers and we applaud the Board for those aspects of the proposals. Well conceived disclosures empower consumers to make the best choices and foster market competition to provide consumers the best products at the best prices. MBA also has long supported uniform standards to end lending abuses and we appreciate the Board`s steps in that direction.

Initially, we are concerned, however, that some of the restrictions in the proposals may unnecessarily limit the credit options available to borrowers who should otherwise qualify for homeownership.

Notwithstanding these concerns, we again applaud the Board`s efforts. MBA is committed to thoroughly reviewing the proposed rule and offering comments within the ninety-day public comment period.`

John Mechem (202) 557-2924 jmechem@mortgagebankers.org