Senate votes to curb mortgage lenders, loan officers

by Jim Kuhnhenn Associated Press May. 13, 2010 12:00 AM

WASHINGTON - Taking aim at deceptive lending, the Senate on Wednesday voted to ban mortgage brokers and loan officers from getting greater pay for offering higher interest rates on loans and to require that borrowers prove they can repay their loans.

The Senate, however, rejected a measure that would have required homebuyers to make a minimum down payment
of 5 percent on their loans. The votes were part of the Senate's deliberations on a broad overhaul of financial rules designed to avoid a repeat of the crisis that struck Wall Street in 2008.

President Barack Obama weighed in on the debate Wednesday, criticizing efforts to exclude auto dealers that offer car loans from the oversight of a proposed consumer financial-protection bureau. Auto dealers have aggressively lobbied for an exemption
from the law, and the amendment, offered by Sen. Sam Brownback R-Kan., could win bipartisan backing.

"This amendment would carve out a special exemption for these lenders that would allow them to inflate rates, insert hidden fees . . . and include expensive add-ons that catch purchasers by surprise," Obama said in a statement.

The administration has fiercely tried to protect the consumer provisions of the bill.


Senate votes to curb mortgage lenders, loan officers