Nation should follow N.C. on mortgage reforms
Thursday, August 30th, 2007
By Chris Fitzsimon
Earlier this month, Gov. Mike Easley signed a law that will make it tougher for mortgage brokers to loan money to people who cannot realistically repay the obligation they’re taking on. It also bans penalties for paying off loans early and requires mortgage brokers to disclose money they receive from a lender if the borrower takes a loan with a higher rate.
It ought to be the law of the land, not just of North Carolina. Such a law on the national level would have reduced fallout from the subprime meltdown that could cause hundreds of thousands of people to lose their homes. The financial consequences are roiling the U.S. stock market and having an economic impact worldwide.
The benefit of laws that prevent lenders and mortgage brokers from unscrupulous practices extends beyond protecting borrowers. Such laws would also help stave off the kind of economic crisis that has plagued the U.S. markets for weeks.
Home foreclosures hit record levels in the first quarter of 2007. Loans at least 90 days delinquent rose in the second quarter by 36.2 percent compared to the second quarter of 2006, marking the largest increase in 16 years, the Federal Deposit Insurance Corp said last week. In Western North Carolina, there were 2,263 foreclosure filings last year, more than double the 1998 level. (more…)
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