Republican warns Mortgage Industry of Increased Regulation

[Apr 22, 2008.]

 

Republican Barney Frank of Massachusetts has commented recently on the state of the economy and specifically the harsh conditions of the mortgage industry, saying that rewriting mortgages in bankruptcy court won't be the solution for borrowers this year, but that the industry has to at least let refinancing occur in this time of crisis, lest they be subjected to tougher regulatory controls by the hand of his committee.

President George Bush and a majority of the Congressional Democrats have agreed on a bill that, if enacted, will aim to assist more than half a million homeowners who are struggling to obtain the cheaper mortgages they need in order to sustain themselves amidst this harsh economic climate. But Republican Frank has said that this effort will most likely not occur by means of bankruptcy judges with improved means of rewriting mortgages, at least within the bureaucratic scope of 2008.

He went on to give an ominous warning to the mortgage industry, saying that if the businesses involved in the market refuse to cooperate with his plan to let conflicted borrowers apply for refinancing into loans backed by the government, then they can certainly expect a harsh regulated future. He also added that regulations will occur by means of a serious effort of legislation to reduce the industry's role as an obstacle to helping borrowers recover from their growing expenses.

Furthermore, he said that regardless of whether or not the businesses like the idea of having to accept losses on defaults and poor loans, they're just going to have to accept them one way or another.

The economy has seen the toughest circumstances it has been in since 2001, and likewise the effects have rippled throughout the financial landscape affecting both large corporations and modest individuals alike. These turbulent times, coupled with the nearing voting season, has inspired lawmakers and plenty of politicians in the White House to cooperate and draw their bureaucratic powers together to forge a series of economic bills and packages that are designed to relieve America at large of the burden of debt.