Banking regs diluted for real estate interests: Barney Frank

TRD New York /
Oct.October 30, 2013 11:12 AM

One of the champions of the Dodd-Frank Act, the financial reform law passed in 2010, is upset with federal regulators for backing down from stricter mortgage rules in the face of pressure from the real estate industry.

Former U.S. Representative Barney Frank blasted regulators for what he said was a failure to stand tall on new rules that place much tighter restrictions on the market for mortgage securities. A coalition of real estate interests and consumer advocates known as the Coalition for Sensible Housing Policy has been lobbying strongly against the restrictions.

“This is a grave error, and contrary to the assertion that it would best carry out the statutory intent, significantly repudiates it,” Frank wrote in a letter sent to regulators yesterday and reviewed by the Wall Street Journal.

The 2,300-page law, which is enforced and interpreted by a variety of government agencies, has been implemented over the last three years.

In August, six regulators suggested tweaking proposed rules that demand mortgage securities issuers hold five percent of the credit risk from financial products they market on their books, according to the Journal. The original proposal did include an exemption for high-quality loans that met certain criteria — including a 20 percent down payment — but the August proposal is far broader and would cover the majority of issued loans, the Journal said.

“If all of these people were correct in their collective judgment, we would not have had the crisis that we had,” Frank said of the lobbyists, according to the paper. [WSJ]  – Hiten Samtani


Related Articles

arrow_forward_ios
Quicken Loans founder Dan Gilbert (Getty)

Quicken Loans’ IPO filing reveals $1.8B in Q1 revenue

Quicken Loans’ IPO filing reveals $1.8B in Q1 revenue
The final week of June saw the average loan size hit $360,300, a record high in the history of MBA’s purchase index (iStock)

Size of home purchase loans hits record high

Size of home purchase loans hits record high
(iStock)

Home loans are getting bigger, even as application volume drops

Home loans are getting bigger, even as application volume drops
(iStock)

Party’s over? Applications for homes loans fall

Party’s over? Applications for homes loans fall
Federal Reserve Chair Jerome Powell (Getty, iStock)

TRD Insights: Why mortgage rates aren’t under 3% (yet)

TRD Insights: Why mortgage rates aren’t under 3% (yet)
Climate change is having an impact on the way borrowers and lenders think about mortgages. The traditional 30-year loan could diminish in popularity. (Getty)

Climate change is messing with 30-year mortgages

Climate change is messing with 30-year mortgages
Mortgage Banker Association’s weekly index shows another increase in purchase applications for home loans during the second week of June 2020 (iStock)

Mortgage applications to buy homes hit 11-year high

Mortgage applications to buy homes hit 11-year high
The share of U.S. residential mortgages in forbearance grew last week (iStock)

TRD Insights: Forbearance requests edge up in June

TRD Insights: Forbearance requests edge up in June
arrow_forward_ios

The Deal's newsletters give you the latest scoops, fresh headlines, marketing data, and things to know within the industry.

Loading...